Towergate launches RDR transition kit for small firms

IFA consolidator Towergate Financial is launching a series of tools to help firms transition to an RDR-compliant business model.

Launching on August 2, Transition Toolkit provides third party IFAs with a neutrally-branded set of six tools, including an investment solution, client service programme, risk-profiling and an IFDL-powered investment platform.

"We saw a huge opportunity to take our tools and take them out into the sector," says CEO Ian Darby (pictured).

The Private Client Programme toolkit will prove especially useful, says Towergate, in helping firms shift to a recurring fee model and segment their business offering.

The acquisition-hungry firm is targeting small, high-quality IFAs who do not want to sell their businesses but are yet to make the costly transition to a post-RDR world.

Business development director Dan Saulter thinks it is essential firms prepare for the "seismic shift" soon to impact the financial services sector but says the cost of doing so can be "astronomical", placing a heavy burden on smaller firms.

"Designing and building a whole-of-market investment proposition from scratch is extremely costly in terms of cash and management resource," he says. "We want to help a limited number of quality IFA firms to make this transition without giving up their ownership and brand."

The investment platform is powered by IFDL - which also runs the Ascentric brand - and will be based on Towergate's existing wealth platform offering. It provides access to tax-efficient wrappers including pensions, ISAs, onshore and offshore bond, unit trusts and ETFs.

At the core of its investment solution sits Towergate's multi-asset portfolios, consisting of six passive portfolios and five active portfolios managed by Cazenove.

The web-based attitude to risk tool (ATR) encompasses a questionnaire with a risk rating from 1-7.

Completing the six component parts is a service programme including fact sheets and newsletters, a monitoring committee to review the Private Client Programme and a fact-finding service to aid holistic planning.

Launch of the third-party toolkit comes as Towergate adjusts its expansion strategy from a model based upon rapid acquisitions to one of selective acquisitions and organic growth.

Darby reveals the firm has four acquisition targets in the pipeline and will make announcements over the next few months. He adds the RDR is creating a wealth of opportunities as retiring IFAs look to sell their customer base.

In February, Towergate acquired John Charcoal, a key element of its growth strategy to establish a mortgage broking proposition. Darby reveals the firm is now trading profitably - largely thanks to a cost consolidation process - and is now looking to increase its adviser workforce from 70.

Meanwhile, Saulter says corporate wrap is an area the firm is investigating.

"We are watching what Hargreaves Lansdown is doing with interest," he says.

Towergate Financial currently has 180 advisers on its books and had a turnover this year of £25m. It is part of insurance intermediary Towergate Partnership which underwent a rebrand last October.