A FINANCIAL services firm is expanding with plans to increase its head count four-fold.
Based in Leeds, Veracity helps independent financial advisers (IFAs) to meet regulatory changes being brought in as part of the FSA’s Retail Distribution Review (RDR). It assists advisers to make the move from a commission-charging structure to the fee-based service model.
Fourteen people currently work at Veracity. However, Veracity’s CEO John Baxter said the plan is to take on about 40 extra staff members next year. This is in addition to the six extra graduates the company plans to take on next month.
Veracity has secured a deal with financial adviser firm Openwork, and there are further deals with fund management and platform groups SEI and 7IM to be announced over the next few weeks, said Mr Baxter. Veracity completed a management buyout from Australian investment bank Macquarie in late January.
Mr Baxter said: “Veracity is expanding faster than anticipated as it reaps the rewards for a change in strategy implemented late spring. Historically, Veracity dealt with smaller financial advice businesses and had a limited range of solutions for them to choose from.
“Widening their range of solutions to include industry-leading propositions from SEI and 7IM has resulted in a significant number of new enquiries from adviser firms already working with SEI and 7IM. In addition Veracity has started to deal with larger advice firms. We have recently agreed an exclusive deal to help national advisory group Openwork with their transformation journey to the post RDR model.”
Veracity previously dealt with 22 firms nationwide. Openwork has in the region of a thousand firms and Veracity started working with the first 15 this month.
Mr Baxter said, in terms of next year, there will be staff intakes in March, June and September, adding: “Of the 40 we take in, I’d look at at least half, between 20 and 30 of them, to be graduates.”
Mr Baxter said it is important to manage the pace of growth, adding: “Because it’s such a highly regulated area we can’t afford to go wrong.
“What we can’t do is let our sales team go out and let everybody who wants to sign up to the service if our operations team can’t deliver it. The way we are tackling this is by heavily investing in new people and we are investing heavily in new technology. This will increase the efficiency of the process but also make it less manual in terms of the delivery of it.”
RDR comes into force at the end of 2012. Although enough advisers look set to reach the necessary bar in time, the problem is firms have not been changing their business model, according to Mr Baxter.
Mr Baxter said: “Trying to service a client with a jumble of ‘flavour of the month’ investment and pension products they’ve accumulated over time will suffocate the capacity out of the practice and pays the adviser little or no on-going revenue. It is also a dreadful investment proposition for the client. This is the single biggest reason advisers aren’t as profitable or as valuable as they should be.”
He said: “What Veracity does is undertake the objective analysis at a detailed client by client level to see whether it would be more beneficial for the client to keep what they’ve got or move to the more institutional class offering their adviser can now provide.”
It also helps them change from the commission based transactional model to the fee based service model, he said.
Force for fundraising
Every year graduates who are employed by Veracity are involved in fundraising for a charity project.
This year, the graduates are fundraising for the Martin House children’s hospice, based in Wetherby, which provides respite care for terminally ill children and teenagers.
A team from Veracity will be rowing a distance of 204 kilometres on machines, the length of the Leeds and Liverpool canal, at the White Rose Centre in Leeds on October 28 to raise money for the cause.
Last year, Veracity graduates raised £50,000 for the Bradford Burns Unit by designing t-shirts in conjunction with Bradford City Football Club.