Independence in the face of depolarisation

Park Row Group, established in 1998, is a multi-distribution retail financial services business offering financial planning advice and products, face to face, online and by telephone. Its business strategy is supported by parent company Royal Liver. Park Row currently has more than 40 branches across Britain as well as 430 advisers, and has grown organically rather than through acquisition.

Q: Has Park Row had to change its business approach since depolarisation came into existence?

A: Essentially, no. The reason I say that is that we are quite vocal about the fact that we are committed to independence. We act as independent advisers and are determined to follow that route. We have made some changes to the sales process, but the final pieces of the jigsaw in terms of the cost menu are now in place. Little impact will be felt from the changes to our cost menu. Our fundamental rejection of multi-tie was instrumental in minimising the impact of changes on advisers.

Q: Why did you decide to stay whole-of-market?

A: I think the key word here is independence. There are two dimensions to our decision. First of all, advisers take enormous pride in staying independent. We have also recently seen a mass migration of advisers back into the independent sector. The second dimension has to do with the consumer. Irrespective of the changes in the industry and of moves taken to increase transparency in the charging structure, the consumer will continue to place value on independent advice. Staying independent was a business decision for us. Also, we think that any advisers who are pushed into a multi-tie environment will react adversely and ultimately look for a new home.

Q: What can you offer your clients that a multi-tied provider cannot?

A: We offer access to the whole market by way of asset allocation products and mortgage products. We also offer a bona fide analysis of the market that is not inhibited or restricted. It is not just about the availability of products in the marketplace, but also about the fact that as a company you demonstrate that you are able to offer advice across many areas. The days of a jack-of-all-trades adviser are behind us and we favour a specialist approach. We have recently put a lot of resources into our corporate and private client division, headed by Pete Sprung, with a very clear focus on developing a tier of high-quality and specialised advisers. This has proven highly effective and increased the calibre of advisers.

Q: Why is it important for all of Park Row’s specialist financial service groups, such as your mortgage advice centre, to remain independent?

A: What we have seen from advisers is that there is a strong belief in offering clients the best products and not being restricted to a certain range. The aim is to be able to walk into a meeting with a client and know that they cannot receive better service or advice elsewhere.

Q: Are you concerned that banks and other large multi-ties will dominate the industry following depolarisation?

A: I am not, primarily because consumers will continue to place value on independence. We can all see which direction the banking sector is going in – they are moving away from independence. The number of independent advisers out there will fall as a result of multi-tie, but that strengthens our hand. It will not reduce the need for independent advice.

Q: What will the role of the independent adviser be after June 1?

A: I don’t think our role as an independent adviser will change: it will only change for those who have chosen to move from being independent to being multi-tied.

Q: In the future, do you think many independent advisers will have to multi-tie in order to stay competitive?

A: I think many advisers will have to go multi-tied in order to survive.

Q: Do you provide different advisory services for private and mass-market clients?

A: We work very much like a legal practice. Irrespective of which adviser has the initial interaction with the client, the client will have access to all services within our business. The only difference is between Park Row (the main advisory business) and our corporate and private client business. Within our entire staff of advisers, you will see a scope of knowledge as well as a team environment. Our advisers are segmented between Park Row and the corporate and private client business but work within the same branch network.

Q: What does your charging structure look like?

A: In terms of the cost menu, our maximum charges are higher than the market average, but this is because of our commercial terms with providers.

Q: What do you think of the increased transparency associated with the new depolarisation regulations, such as the menu and fee structure?

A: If we look at this in real terms, it is not problematic for advisers to explain the charging structure to clients. I think it will increase the focus on the rate of commission as well as the fees charged to the client and will bring the focus back to client transaction. The new structure should help to promote a healthy relationship through reviews and periodic consultation.

Q: Are you currently offering funds from fund supermarket ranges?

A: We give our advisers the choice to use fund supermarkets at their discretion. They have the same option with multi-manager funds as well.

Q: What features do you offer that enhance your service?

A: We offer the accessibility of advice as well as a national branch network. We also provide a diversity of expertise at a specialist level.

Q: Are you planning any changes to your service before depolarisation takes effect?

A: We look at enhancing the service we provide to clients on an ongoing basis. In terms of the depolarisation deadline, it is only a few months away now, so we will not be making any major changes before then.

Q: Have all of your advisers been positive about your decision to stay independent?

A: Absolutely. Our advisers showed huge amounts of relief when we rejected the multi-tie route. We have received a lot of support from all quarters. It has been a popular decision.

Q: Which distribution model do you think will have the most success this year?

A: This is a difficult question, as a number of providers are being pushed into a multi-tie scenario. I think it is inevitable that the volume of business for multi-tied providers will grow this year. However, I also think the independent sector is far more resilient than many parties believe. As long as consumer demand for independent advice is there, it will be a difficult element to ignore. The industry has spent years creating consumer awareness of depolarisation and the value of independent advice.