Firing Line: Lee Travis
29th Septemeber 2011
Lee Travis, head of SimplyBiz' New Model Business Academy, talks to Melanie Tringham about the many challenges facing IFAs as the 2013 deadline approaches and how the NMBA hopes to play a big role in moulding the adviser community of the future
The RDR has thrown up a multitude of dilemmas for IFAs: should they be restricted, how will they get qualified, and how will adviser charging apply?
The problem is that many IFAs work on their own and some of the choices can be overwhelming.
In response to the changes many are facing, adviser 'academies' have been springing, many of which have come from the big providers.
SimplyBiz, the support services company has joined the trend, with its New Model Business Academy, designed as a not-for-profit organisation for IFAs, where many of the services are offered free.
This is due to the fact that the academy has been sponsored by a range of product providers - Prudential, Zurich and Partnership are a few.
So IFAs can use the NMBA for anything from downloading exams papers, to joining a business club and getting face-to-face training, although this incurs a charge.
Lee Travis heads up this academy, and makes it clear that there is no product push by the sponsors, especially when they help in the technical seminars.
Mr Travis said: 'They totally believe in the concept. They like the fact that they are associated with a business which is supporting financial advisers and they are not looking to make a penny from it. They are getting a lot of brand exposure out there.'
The biggest problem for IFAs is they are having to re-engineer their business, with the deadline of 2013 focusing their attention on the fact that they need to be able to have made the change in just over a year.
Mr Travis, who works with a staff of four, said: 'They are generally accepting RDR. The feeling is that we have been talking about it for a few years and now it is time to start doing something about it.
'When it comes to qualifications, the vast majority are well on their way to make it in time. If you asked me last year, it would have been different.' He said in a recent survey that the academy did, 42 per cent are QCF level four qualified, and a further 51 per cent are well on their way.
The bigger challenge is business transition. With the disappearance of the transactional model, and introduction of adviser charging Mr Travis is finding that some IFAs are not dealing with the issue properly.
He said: 'When it comes to having a profitable proposition that clients value, a lot of people are not getting round to doing it properly. It is a transition that is going to take time as you implement the business.
'There are still a lot of guys for whom the fees are the biggest issue. They are hung up on the words. Some still think that they are going to have to charge an hourly rate. If you are working on 3 per cent and half a per cent trail commission, and remuneration is by a product, then you can do that when it comes to adviser charging.'
His argument is that the biggest change relates to transparency - IFAs may have received a commission from the product provider, without the client knowing much about it. If they are used to receiving a certain percentage from the funds invested, then they can still go ahead with that but the conversation has to happen with the client and be agreed as such.
Mr Travis said: 'There is a misconception. Adviser charging is going to be agreed by the adviser and the client, it is not going to be determined by the product provider. If you are taking 3 per cent from the client's funds, then 97 per cent is invested. As long as the client is happy, if it is completely agreed with the client, you have still got the facility to be remunerated by the product, which a lot of people have done.'
As part of the process, he added, IFAs need to say to their clients what they are going to do for the money, present a service schedule, and make it clear what they are being offered.
One of the other issues that many advisers face is the question of isolation. Many work on their own, or with just one or two other people, and find it difficult to get support on some of their more perplexing problems.
The NMBA has a solution to this as well. It organises clubs for its IFAs, who meet on a fairly regular basis, to share ideas and solutions that they might have come up with.
The clubs meet on a quarterly basis, with about 12 people sitting round a table.
Mr travis said: 'The advisers discuss issues they are facing, and they come up with solutions because they are sharing ideas. They are a bunch of IFAs doing a similar role in a regional location. They are all in agreement not to compete. There is an exchange of ideas.
'Because they are learning new things every time they go, even if they take away one or two business gems, you can do something with them and it is a reason to go back.'
The NMBA came about from the idea of Simplybiz chairman Ken Davy. He wanted to do something for the IFA community, at a time of massive change.
At present, the academy has 10,000 members. But the question remains of what will happen to it after January 2013.
Mr Travis said: 'We are definitely in it for the long haul. Just because of the RDR in 2013, does not mean that the world is going to end and people will not need further support.'
In addition, he said that there may be a future role for the academy in developing the next generation of advisers.
He said: 'We are really concerned when we read about the percentage of IFAs that we are going to lose because of the RDR, and we are just not getting the new guys coming through. If we are going to bring new guys in, we will still have to get to level four. We recommend that people continue with their qualifications and enhance their standards.' This could mean, he said, going to certified level or achieving chartered status, or conforming to the ISO 22222.
Mr Travis comes from both sides of the fence, as a qualification for his role. He started as a financial adviser for Royal London, then moved to Skipton Building Society as a mentor mortgage consultant, and ended up at Bankhall for a few years, where he was development manager. Mr Travis said: 'I learned an awful lot when I was at Bankhall.' This is where he really learnt about the world of the IFA, making the transition from dealing with clients to dealing with IFAs.
One of the current issues facing advisers at present is if they make the move from independent to restricted. He said: 'For years IFAs have fought to maintain the independent label, and I can understand the advantage. They are now starting to get their head round what it means to stay independent. It will be a challenge.'
Research suggests that 4 per cent will go restricted - Mr Travis believes it could be slightly higher than that. He said: 'There could be independent businesses that go restricted and will be profitable. Most guys will remain independent.'
Lee Travis: CV
2010-present: Head of the New Model Business Academy
2004-2010: Development Manager, Bankhall
2002-2004: Mentor Mortgage Consultant, Countrywide Financial Services
2000-2002: Building Society Manager, Skipton Building Society
1999-2000: Financial Adviser, Royal London