EXCLUSIVE: How A Think Tank Aims To Shape Ideas For Post-RDR World

Tom Burroughes

7 November 2013

, a UK firm based in Bath in the western part of England, has recently seen one of its partners, Dr Markas Gilmartin, named as chairman of the Leading Edge Adviser Forum, a think-tank to help drive changes in an industry coping with regulatory and other major changes. This publication recently interviewed Dr Gilmartin about LEAF and its work.

When and why was LEAF set up?

Originally a smaller group was created four years ago but given the significant structural changes in the market - not least those triggered by legislation and the RDR - we felt that a regrouping was necessary.

Allied to this many of the participants had now set up their own businesses and the process of professionalism in the IFA world, started by Dunton in the 1960s in America, has now reached the UK.

The LEAF group, with its diverse mix of people, wanted to be at the forefront of market changes. This rekindled interest in the forum and explains why it was reactivated in August 2013.

What is the primary purpose of this organisation? Has that purpose changed since it was founded and why?

The organisation's primary purpose is to share wisdom and knowledge, and help develop and stimulate critical debate in a live, dynamic sense (outside of blogs). It seems that the IFA world has little support and a small voice. We hope we can change that in some small way.

Many of the themes and concepts we are exploring we feel deserve wider currency. For example, we are looking at the viability of different business models in the new RDR world and how we can professionalise the industry.

The purpose of the group hasn't changed but we are now more focussed on the changing legislative landscape and the challenges that this poses to the industry. We are a much more diverse group of people now and our members include business owners for the first time.

Approximately how many members does it have? Where are they from?

We have 13 members. They come from private banking (Barclays), insurance (Generali and Aegon) and financial planning (Epoch Wealth Management, First Wealth, Beckford James and Dragonfly). All are at a senior level and include business owners, partners, MDs, or director level professionals within private banking.

What sort of impact does LEAF hope to have on policymakers and the industry?

Once we gain traction we hope to be able to contribute to the knowledge pool - ultimately indirectly shaping the industry and influencing decision-makers.

Do you have much contact with the new national regulator, the FCA?

As we gain pace we hope to.

How much time do you devote to the RDR and the continuing impact of that regulatory change?

About 20-30 per cent of our time is devoted to the RDR, mainly on fund and wrapper market research. Much of our time is spent discussing client propositions, fee agreements and treating customers fairly (TCF). It's all about providing greater transparency and a fair deal for clients.

What would you say are the biggest themes that you discuss at the moment and why?

The biggest themes we discuss are fees and legislative compliance, and the tax implications of the RDR, for example in trusts. It's a question of how best to balance all these regulatory changes to ensure we are 100 per cent client focussed. Many customers detest paperwork so keeping things seamless and client-centric is one of challenges we face as a profession.

Another theme is service differentiation and the importance of providing exemplary client service and transparent advice.

Who set up LEAF?

Simon Bullock of Barclays Wealth was the originator of LEAF and he is still involved today.

Why do you think there is a need for such a group - clearly there are some others who get involved in the IFA and related community? What makes you distinctive?

Given the significant structural changes in the market and new legislation, we felt that there was a need to reform the group.

We believe that our wide experience and skill-set - and a shared desire to improve the way the industry works - is what makes us distinctive. We are comprised of business owners for the first time which provides the group with practical, as well as theoretical, input.

Does LEAF produce white papers and research reports?

Not at the moment. However, we do disseminate our findings through the financial media but hope to contribute in a more structured way going forwards. The second meeting of LEAF will be held on 4 December.