On looking at my client bank, I have been doing a lot of work dealing with firms selling their business or mortgage firms losing their positions on lender panels.
One of the firms has spent the last three months arranging for the business owners to retire by selling their business to a larger firm. The due diligence undertaken by the buying firm was very detailed. I did not see any of the financial reporting, but was involved in providing a lot of information relating to past business, particularly in the pension transfer specialist area. Fortunately, the firm was able to provide all of the information requested because it had maintained good records of all the business and how it been undertaken.
The value of the business was calculated on business of the directors only. There were three advisers that were self-employed advisers and their business was not counted in the figures and were allowed to take their clients and the ongoing value of their business to whatever arrangement they made for their ongoing business. The directors provided various introductions to prospective firms for their advisers to join.
Because the decisions are so vague, any appeal is virtually impossible as the advisers do not know what has caused offence.
All the work that I put in was to ensure that the buy out was able to proceed and the success of that transaction loses me a client firm that I have enjoyed working with because the compliance was all in place and the people had a similar ethical view to my own. Yes, I am that turkey that voted for Christmas.
Another firm is looking at an exit strategy for the owner. The firm has had a history of having a revolving door for advisers joining and leaving. The plan to sell is known to the advisers, but there are no details yet. Early stages. Looking at sale or private equity investment. I guess that I will not be engaged until some sale is agreed. Although I feel that it would be better to be sure that everything is in place whilst looking to negotiate a price.
Another firm is a pair of advisers who are simply investigating the sort of values that will be offered. There is the thought that they might wait until they hit a target level of assets under management. But we have had a lot of discussion about how the process can be made to work for them. I am used as a sounding board for them as a trusted adviser.
At the other end of the scale, I have been working with a couple of firms that have been removed from lender panels. The lenders seem to be quite trigger happy. Removing firms without warning and often with vague rationales for their decisions. Because the decisions are so vague, any appeal is virtually impossible as the advisers do not know what has caused offence.
Halifax has some kind of appeals process, but I have not experienced a successful appeal. I would be delighted to hear from somebody that has. NatWest will not allow an appeal for six months after the suspension has been advised to the firm.
What these lenders do not seem to realise is the reputational risk to the firms that they have suspended. The firms need to report it to the FCA and also change their initial disclosure documents to advise of their limitation of not being “whole of market”.
A client, whose mortgage had been offered, was advised by NatWest that their mortgage had now been declined because the introducer firm had been removed from panel. I cannot see the this is in line with Treating Customers Fairly or the Consumer Duty of Good Outcomes for Clients.
The other piece of work that I have been trying to do is the report writing work. I completed the Tax Efficient Investments report last week and the preview of the report can be seen on my website. Anybody wanting a copy, please contact me hello@thecattseyeview.co.uk . I am now collating my platform report and expect that to be ready in the next week. That has proved to be a popular report as most advisers use platforms. Again, please contact me. Following on from that will be the Managed Portfolio Services and Multi-Assets Funds report. That also has a wide following and will be available soon.
