It is no secret that times are tough for advice companies, as the UK financial regulator recently said that there are 4,000 firms at risk of failure, however there is one company that is looking to beat the odds.
Adsen Moore is run by group chief executive Daniel Goggin.
At the end of last year, Goggin pulled his business out of the Blacktower Group.
The firm has two companies; Adsen Moore UK, which is an appointed representative of Hoxton Capital Management and Adsen Moore Europe, which is in Malta and is an appointed representative of NSF.
Goggin, who was Blacktower’s global head of banking and finance, said that the UK and Malta operations both await a direct licence.
Growth plans
The company has ambitions to create advice networks in the UK and in Europe.
“In Malta, the network application has gone into the regulator,” said Goggin. “In the UK, we are on the business plan about to enter an application. From an expansion point of view, the idea is that it will not be Adsen Moore that gets the licence, it will be an appointed rep of the network that I’m going to set up.
“In Europe, we would run the network how we would want the UK to look. Some people will have to have to change their mentality, because we wouldn’t allow them to come in and sell products that are not in the best interest of clients.
“But once the networks are up and running, we will embrace robotics as much as we can. AI technology and robotics is the future.
“Our expansion plans are a huge, we will quadruple assets under management every single year for at least the next five years.”
European issues
Goggin, who was formerly a wealth adviser at the DeVere Group, believes that the European financial advice market “really needs” networks.
He added: “I think financial advice in Europe as a whole is terrible. Maybe not locally, but certainly from international finance firms. I think nine times out of 10 clients have been mis-sold. It’s unbelievable what happens in financial services and my aim is to come in and make it as RDR-compliant as possible.
“I think you will see huge court cases come forward. I have worked with clients that have been charged 8% on the life insurance bond that they don’t even need, 5% on the funds, they charge the client 1% a year on top of that, which is the fund adviser fees.
“These clients, I’ve run the numbers, need to make nearly 5% a year before they break even. It’s just not fair to the client, they don’t understand what they’re signing.
“For me, this is going to ramp up and up, and no win, no fee lawyers that I’ve spoken to that have started to get an understanding of what’s happening in this market. I don’t understand how these firms are planning to pay their fines, because they mis-sell every single client.”
FCA Sipp crackdown
The Financial Conduct Authority (FCA) recently turned its gaze to international self-invested personal pension schemes (Sipps).
According to a letter seen by International Adviser, firms that previously indicated to the financial watchdog that they operate a Sipp targeted at non-UK residents are being asked for more information.
Goggin said: “The problem is that the FCA don’t want international advisory groups advising into the UK.
“What I certainly found when I was on an international licence, it was a lot harder picking what trustees we could use without the FCA licence. Adsen Moore will have the availability of the whole Sipp market. The international firms have the availability of maybe five providers, and those providers are twice the cost of every other provider.
“I think the issue is that these international Sipp providers have been given so much business from these international finance groups, that they ended up twisting their rules and became controlled by the international firms.
“As soon as no win, no fee lawyers see these things and can go down the route of mis-selling, they will do.”
Target market
The firm is not going to be a traditional advice firm in the UK and European market.
It will not be aiming its offering to expats.
“The type of clients that we take on are usually not international clients where they’re living now,” said Goggin. “They’ve worked internationally for a period and often returned to their home country.
“By that I mean, we would deal with Italian bankers that worked in the UK for 20 years and then moved back to Italy.
“We’re still looking at those UK pensions, and the assets that they’ve built up. I guess that we’re looking at the same things that most other IFA firms are looking at, but we’re doing it for a different demographic of person.
“We’re not going to recommend an Italian pension to an Italian because we don’t have a local Italian licence to do that and we also don’t have the expertise.”
Gap in the market
Goggin says that his experience at previous firms highlighted how much this was a gap in the market.
He added: “I could clearly see that you needed to find the gap in this market because every single adviser seemed to advise exactly the same person as who was sat next to them. I’m always looking for that gap in the market where people aren’t getting advice or getting the right advice.
“Our focus is the professional market, people who work in financial services. I feel that they’re under supported and under advised, whether they’re a local, international or a returning person.
“If you look at just the UK market, for instance, you have IFAs running about that want to charge 5% on the way in, and then 1% a year, and they make their money from that 1%.
“Professional clients probably have more financial experience than we do, they’ve got masters, they’ve got 20 years on the equity market, for them, they want to either work with you or choose their own investments.
“But in regard to knowing about pensions or tax, they need a financial adviser for the structural set up.
“When they tend to approach financial advisers, they are getting charged 1% a year and these clients are going to refuse to do that. It is just an area where people just aren’t getting advice at all. People aren’t willing to tailor to them.”
M&A
The financial advice M&A market has been very active over the last few years and is expected to grow due to the pandemic.
But Adsen Moore will not be using acquisitions to expand.
Goggin said: “The first problem with M&A is that you’re going to be picking up a book of completely the wrong clients. I think 90% of clients have been mis-sold to, therefore, I would be buying a firm that has got 90% mis-selling inside, and it’s ultimately who is going to pick up the liability for that when it goes to the courts.
“It’s all well and good saying that you’re going to go in and sort these things out, but most of these clients are locked into stuff that they can’t get out of.
“I’m sure that a lot of firms would have liked to have sorted the errors that they’ve made in the past, but can’t because clients are locked in. To go and buy one of those firms contradicts the idea of what I’m trying to achieve.
“Secondly, you get what I call the dinosaur IFAs, the people that are going to refuse to move on to the new model of charging, the guys that are not going to go away from commission and locked in products, and selling commission planned funds.
“Those guys are usually some of the top performers inside the company because they’re charging double what everybody else is charging. Therefore, you’re going to pick up a firm, 90% of the book is toxic, and the 20 best salespeople you might not want anymore.
“I quite like the new blood into the industry. If you have look to the trainees that I have now, they’ve got 20 years of financial services experience, but not as an IFA.”
Hubs
Organic growth is the name of the game for Adsen Moore, and the firm hopes to open up some European hubs in the next few months.
It recently hired Glenn Stroud to head its European business. Stroud was previously a financial adviser at Blacktower and a senior trader in London before that.
His job will be open two European offices in 2021 and Goggin said that the firm will “certainly” open an office in Barcelona during the year to support the growth the firm is achieving there.
The firm is also “very likely to open up in Milan because we do so much work with Italians”, Goggin added. “And then potentially into the Nordics because that’s where my history is. I have a lot of clients and a lot of contacts in the Nordics.
“We would definitely go to the US, but that’s probably three years away.
“We have this kind of this double-edged sword, where Adsen Moore is going to expand very rapidly, but at the same time, we want to make sure its organic growth where we can ensure our clients receive the support and guidance they have been promised.
“We really don’t want to be one of these archaic, Mickey Mouse IFA companies that work internationally, slip between the rules so they never give their clients very good advice, and get away with it.
“I’m 32 years old, I’ve got to work for the next 30 years, so this needs to be very ethical and with that comes massive expense.”
