Company obsession for NOI / EBIT is a likely harbinger for disaster
MFP was created predominately from the takeover over of Jelf Financial Planning (JFP). JFP was a well-regarded Wealth Management business, endorsed by client service accolades alongside an experienced and capable Adviser Team, many of whom were Chartered, underpinned by an effective and energetic Management and Support Team. Clients were genuinely front and center of the overall advice and service proposition.
Since Mercer took over, it’s reasonable to say that the Financial Planning business has taken a major backwards step. The underlying reason has been poor management – harsh but fair.
Most of the current Management are from the pre RDR world, with very limited technical knowledge & know how, which negatively impacts the business’s decisions & direction, but also their ability to deliver effective coaching and development.
A significant number of the Advisers & Support Team members have chosen to leave the business over the last 3.5 years, c19 Advisers have left, with a similar number of experienced Support staff. Client Service has understandably suffered, Advisers regularly wait months for a financial report. Admin errors, mistakes and complaints are endless.
The Client investment offering is due to take a major step back, with a new CIP effectively creating a ‘SJP’ style vertically integrated business, which will see Mercer Funds having to be recommended first and foremost due to the additional revenue earned from these funds alongside the advice fee. A CIP with such a restrictive approach is understandably a red line for most Adviser who want to ensure they can provide best advice for their clients.
New Business targets & focus has increased considerably, driven by short term profit / NOI demands from the business, which has resulted in a perception that existing clients are secondary. Completing such new business targets will be ‘challenging’ given the headwind of Support issues.
The remuneration scheme contains a significant ‘holdback’ element of 50%, which is subjective in its payment / release, and is heavily dependent on revenue results.
