Why I left my national IFA (and why I joined)

Two IFAs, one a former directly-authorised adviser who joined a national and one who did the opposite, on why they followed their chosen business paths...

“My only regret? I wish I’d joined a national earlier”

1). Andrzej Garwolinski

A self-employed adviser for six years, Andrzej joined Positive Solutions in 2008. For him, income targets, retention thresholds and a perceived lack of identity are not a problem...

Why did you join a national IFA?
Having separated from two business partners, I attempted to recruit a friend to join me as a business writer. Over lunch, I realised the benefits of joining Positive Solutions. Within 26 days, the paperwork had been done and I was on board.

The business of being in business was taking up too much time. Time spent each week dealing with FSA updates and emails was affecting the level of business that I could do. I have been a high producer ever since I came to financial services, but I was not seeing the results in  profits.

What are the advantages?
A huge relief is that compliance, TCF and capital adequacy are shared responsibilities. It now costs me a maximum of £20,500 to run my business annually, whereas it was costing me more than £70,000. That is a brilliantly-reduced expense for me.

Another benefit for me was that, as soon as I joined Positive Solutions, the company announced a Learning Academy. While I was registered direct, I had spent £1,500 on books and courses to achieve diploma status. Now I was being awarded a grant of £1,500 to study free of charge. I would ring the CII, they would send me a book, but there would be no invoice. Fantastic.

What are the drawbacks?
It takes a little time to learn a new way of working. It is like starting a new job: you know what you are doing, but you have to develop local knowledge again. But it doesn’t take long. You also lose some of your individual identity. But this wasn’t as big a problem as I thought.

I had to use the Positive Solutions branding, but I have not lost any clients since I joined. I don’t really care what it says on the business card. Advisers here must be productive. You have to generate £50,000 or £60,000. You can’t have timewasters.

Is there anything you miss about being DA?
My only regret is that I should have done this earlier. Anybody who thinks joining a national is a backward step may very well be deceiving themselves. In time I think it is something they could end up regretting. I would recommend this to others.

Since I joined the company, I have referred two former colleagues. If I thought a flaw existed in the organisation, I would have deterred them from joining.

“Handling your own compliance can be an advantage”

2). David Burgess

Although providers began treating him differently as a directly-authorised adviser, David, formerly of Positive Solutions, says this was a price worth paying for being able to set and follow his own rules...

Why did you move?
Quite frankly, I felt that I and my business were mature enough to become directly authorised.

With RDR approaching, I started to take a closer look at my future and felt it was far more important for me to try to control my own destiny. True Potential handled everything for me.

Now it is only me who is answerable to the FSA, as opposed to fitting in with how another company runs things. I feel like now I very much have control of my own clients. Previously, I had been dealing with some of my customers for 15 years but, in light of the changes to trail commission, it made me realise that, in the eyes of the regulator at least, I didn’t have any clients at all.

What are the advantages?
You might not necessarily think handling your own compliance is an advantage, but it can be. It is not that anything is less stringent, or that suddenly I can cut corners, but now I follow my own rules; I know what I’m doing and why I’m doing it. I feel like I can justify things now. I no longer follow a one-size-fits-all approach.

Another big advantage for me was financial. Previously, my costs for running the business were in the region of £20,000 per year. Now I think they have reduced to about £15,000.

What are the drawbacks?
When you’re with a large firm, so many things are done for you automatically. For example, a lot of the peripheral things, such as arranging PI insurance and IT support. If you go it alone, in theory all those things are there as extra bits for you to worry about.

But often the reality is that it’s a fear of the unknown. When you get there, it is not as bad as you think.

Is there anything you miss about being with a national IFA?
I miss the regular meetings, when I would meet with my peer group, though I still meet advisers at seminars. I suppose you have a little bit more clout with providers to get things done.

I recently rang an insurance company and was told as I was no longer with the national, I could no longer use the number I had called on. I had to go via a different route. It was more the inference that as I am no longer with a large company, I am not quite as special a customer as I once was. I’m no longer a big-hitter.