Honister Capital mulls ‘unbundled’ offering

Honister Capital is considering offering an “unbundled” support package to its group companies as part of a proposition re-think ahead of the RDR.

The business describes itself as a "full service outsourcing company", offering compliance, IT and research capabilities to IFAs Honister Partners, Burns-Anderson and Sage Financial Services.

But strategy and business development director Alan Easter says the group, which recently announced operating profits of £1.5m for its first three months' trading, is considering stripping down the service into its component parts and allowing firms to select those they need.

Easter anticipates there will be fewer advisers on 1 January 2013 - "could be 5%, could be 50%", he says - and argues national and network propositions will need to re-think their pricing strategies to cater for the drop in income.

The full support service offered by Honister currently costs firms about £500,000 each year.

"We are in discussions about offering a partial, or unbundled, service, where companies can pick and choose what they need," he says.

"It is an idea that has the backing of the entire management of the business but it remains at the early stages. We are not yet sure what it will look like or how we will charge. There will be a fixed income service and a service where there is variable income and we will have to get the balance right."

Easter says national and network IFA propositions will have a "challenge" rethinking their pricing propositions for their member or partner firms post 2012.

"There will be fewer people writing less business and something will have to change," he says. "Either prices will have to rise or they will have to come up with an entirely new way to charge for their services."

Honister Capital was launched in June last year after acquiring the shares of The Money Portal's advisory businesses: Burns-Anderson, Sage and Willis Owen, as well as the principal assets of Bates Investment Services (now Honister Partners).

Overall, the group made an operating profit of £1.5m during the period, of which £1m came from the group's advice businesses.