Seeing the world in Monochrome or full colour
This period under lockdown has been an interesting one for us, at ValidPath. It seems that a significant number of advisory firms out there are using this time as an opportunity to reassess their requirements, and we have seen quite a few approaching ValidPath, largely because of what they have read about our culture and approach when it comes to actively supporting independent financial-planning firms. Alongside this we have also observed the less positive phenomenon of other networks and service providers using somewhat spurious and manufactured narratives when approaching Members to spruik their wares that, thankfully, ValidPath Members see right through.
Inevitably, this kind of backdrop can lead one to reappraise their perspectives and stance within this marketplace. What is it that ValidPath is really about, and why is this important for the success of IFA firms? We have complied a few thoughts, clustered around two images - one monochrome, and the other somewhat...er...colourful.
This first graphic is monochrome because it presents the stark, binary choice facing intermediary firms - the choice between going it alone, and pitting one's chances against the combined forces of the various regulatory bodies, or the alternative of belonging to the kind of community which is enshrined by the Network. It is our opinion, based upon extensive and entirely consistent experience, that whilst the various organs of regulation were created with positive intent, and whilst individually they may achieve some good, cumulatively they have evolved into a suppurating burden that directly impacts on the capacity of intermediary firms to operate in a commercial manner. To the extent to which ValidPath can absorb that pressure, we provide our Members with an opportunity to flourish that would otherwise be impossible.
And we do this in a whole variety of ways:
By working hard to make regulation comprehensible
By adapting systems and processes to bake in good compliance
By setting internal standards that exemplify best practice
By fixing all the infrastructure components so that you don't have to
By taking upon ourselves nearly all of the regulatory burden that would otherwise fall on intermediaries
By handling complaints against you and by defending our Members against cynical opportunism
By negotiating preferential terms with third party providers that may enhance your business
There's a whole lot more besides, but I wanted to avoid this blog turning into a page of bullet-points. Hopefully, I have supplied enough detail to convey the idea that there is real substance to the Network proposition, beyond all the marketing puff. Now, of course it is also true that (a) not all Networks have been a resounding success, and (b) the current offerings in the UK vary enormously in terms of their underlying values and culture. Certainly, ValidPath's experience of hostile attacks indicates that some quite big names have not recently undertaken much T&C on the subject of professional ethics. So now I come to my second image, the one which attempts to summarise what ValidPath is up to:
Yup, that is
a bit of a contrast, isn't it? Hopefully it gets the message across. As you move up from the bottom row, the progression is towards higher-value, more professional intermediation models. And, as you move from left to right, what I have tried to do is cover the categories
of intermediary model that we encounter within the marketplace. As you'll see, ValidPath are not at all interested in the bottom two tiers of advisory model - and what we're really
interested in is the top one, as measured by the three ticks
. We're happy to cater for the next two tiers down, on the understanding that many professional advisory firms are on a journey, in developmental terms, and we want to support that kind of upward progression. We're relatively agnostic as to whether you want to be a generalist or specialist, or adhere to active or passive investment models, or whether you want a lifestyle business, or are at the growth phase, or, indeed, are beginning to think of an exit.
We want to support all of those variants, and we're really not going to push you into being something that doesn't come naturally. Our Members know that we'll spend time with them, working on such matters, and actively aiming to help wherever we can. That is to say, we have taken steps over the years to define the breadth and depth of our Membership, to provide a healthy balance between diversity of proposition
, on the one hand, and a set of rigorous criteria which define quality
, on the other. ValidPath Members are not carbon-copies of each other, but equally well they share sufficient cultural DNA to be assured that we have minimised the risks of contagion, as far as is possible in the current UK regulated marketplace.
Wherever you are in your business trajectory, providing that you occupy the top three tiers in the above graphic, then you'll find ValidPath a natural home, one that houses a likeminded community of professionals. It's better to be together than on your own.