Wealth Professional catches up with BT Select MD Phil Butterworth to discuss how his arm of the BT family aims to expand. Does your practice fit the bill?
What is the licensing arrangement for advisers who are aligned with BT Select?
Practices can select from a range of services. The first choice is to be licensed or to have their own license.
We’re trying to build a selective community. So we’re not after a numbers game here, we’re targeting 100 to 120 practices over the next three years – but good quality.
How did BT Select come into existence?
As we know, the last four, nearly five, years of this industry has been a pretty horrid time.
Everybody at the moment is looking into the next five years, making sure that they’re backed by the right infrastructure to ensure that they can extract what they require for business growth opportunities.
BT Financial Group recognised the market is going through a significant realignment at the moment. And to broaden its offering to the marketplace they’ve done extremely well in regards to their ability to provide services at a corporate level to other institutions. They’ve done very well with, say, Securitor.
BT Select was another opportunity to help BT broaden their advisory footprint in the marketplace, and do it rapidly with the new team, led by myself.
It was an opportune time to launch this, to leverage off a market that is looking for answers and looking for the right partners. And BT, with its heritage and its reputation, was well-placed to back me and the team to develop this solution to capture the imaginations of the firms that we now have.
What are practice owners’ key concerns?
Obviously we’re coming into an environment of change from a legislation point of view with FoFA, so many practices want to make sure that they’re accessing the right minds around what are the things that they need to do within their practice to make the change – and then deliver the appropriate tools into that practice.
That could be having the right compliance framework; documentation to clients; technology processes and workflows; the client value proposition; opt-in and fee for service methodology; through to the platform and moving to a no rebate environment where there is very transparent pricing around who is paying for what.
So, depending on the immediate needs of the practice, all those are important. But there might be a stronger weight on one or the other – depending on where that practice is.
What is the service structure for BT Select’s practices?
They sign up to certain services, but masterclasses, our education forums and on-demand get-togethers are open to all of them.
Generally we work quite closely with the practice to uncover where their major issues are, or areas of knowledge or skills they’d like more of. And then we’ll run those different programs through the year, depending on where their inputs are.
Say there was one on succession planning; you might find that a few practices have no interest in that because they’re well set. So they wouldn’t attend that session, whereas other practices would. So we basically make sure that the sessions we’re running are nominated and relevant to our community.
Do practices pay a fee per service?
There are two levels depending on, first of all, which licensing structure you use. If you come under Magnitude and you’re under our license, then there’s a specific framework of the way that we charge the practices to be part of that. That’s a commercial arrangement, so we deduct the fees each month, and the revenue they generate goes straight to the firms. Within that environment also they can select different services on top of that – which they can pay for or not.
If they’re under their own license then a range of services are then broken up and modulised into different fee structures. If they’re taking our technology solution, or utilising our compliance and governance solutions, there’s a commercial fee arrangement around each of those pieces.
BT Select aims to recruit 100-120 quality practices in three years. What are the criteria for selecting those practices?
We want to see a multi-partner practice with a growth focus. We’re not after a business with no growth aspirations. We’re after a growth-focused practice; multi-principaled; fee for service. They will obviously have a good compliance culture, and of reasonable scale so that we know that they can deliver the right solutions to their end investor.
Do practices that want to join have to be aligned to BT Financial Group?