Managed portfolio service (MPS) provider Ebi has made several board appointments to up its compliance and governance standards as a requirement from the Financial Conduct Authority (FCA), it shares with Professional Adviser.
The provider's latest appointments include Paul McMahon as chairman and Harry Hitchcock as chief operating officer.
Continuing board members are founder, CEO and chief investment officer Craig Burgess and non-executive director Mike Morrow. Morrow was a previous board member of financial advice trade body PIMFA and is currently chief commercial officer at Parmenion.
Alongside the board restructure, Ebi has appointed Sue Smith as head of compliance.
"Her experience and expertise will ensure that Ebi continues to adhere to regulatory standards and mitigate business risk effectively," Ebi said of Smith's appointment.
Talking to PA, Burgess said: "From a governance point of view, in financials—like it or not—you run a board.
"When you're managing £4bn of assets, you're not going to walk into a regulator's office with complaints. You turn up, you tick every box. Full stop.
"They're just not going to be happy with two or three people on your board. There are strict governance requirements.
"If you're not independent, regulators worry you could effectively run away with something you shouldn't be doing—and there's no independent oversight."
Board changes a requirement from the FCA
Burgess explained that from a regulator's perspective, these board changes were a requirement.
"As we scaled up our assets under management, we had to up our governance game," he said. "You also feel it, sitting at the board table—you realise you need more confidence in the room, more challenge, more people to check and test the way you're thinking and approaching things."
He continued: "We were a small, close-knit group, but we're becoming a larger company. Things change when you get past 20 people. The lines between managers and staff become more defined. You're no longer in a tight-knit huddle where everyone knows everyone.
"You have to professionalise. You have to make the board what it needs to be for the 21st century, especially in a highly regulated environment."
FCA MPS review looms
Burgess said that part of Ebi's governance review was focused on compliance and getting itself ready for the next evolution of regulation, alluding to the FCA's MPS review coming up.
In the review, the watchdog will be using the Consumer Duty as a lens through which to assess the market.
"You start identifying where the pinch points might be: Consumer Duty, vulnerable clients—all the things that are right at the top of the FCA agenda," he told PA. "From our perspective, we believe we're fit for purpose. We've ticked all the boxes."
"We've made a significant investment to ensure we're able to meet those requirements."
From an MPS perspective, Burgess stressed that providers do not "get a free pass just because you don't meet the clients".
He said: "The regulator's view is: tough luck—you still have to demonstrate you're ticking all the boxes, from financial crime to client vulnerability.
"That's a real challenge for firms like ours, who are onboarding huge volumes of new clients every month—clients we never meet, and to whom we can't give advice, even if we identified vulnerability.
"These are nuanced issues, and we have to be able to demonstrate we're handling them appropriately."
Advisers struggling with gathering correct data
When it comes to demonstrating that regulatory demands are being handled and gathering the correct data, Burgess said that he does not think many advisers are fully up to speed on this.
"We're asking them for data they may not be gathering—or not gathering as accurately as they should be," he said. "In some cases, we're asking more of them than the regulator does—but we're told that's the standard we need to meet."
Burgess continued: "We're often saying: 'You need to make a choice. You just don't realise it yet'.
"Frankly, we need the regulator to do a better job of helping advisers understand why we need the data."
Burgess also believes that competitors are not in the same place as Ebi yet.
"They're not necessarily collecting, managing, or reviewing data at the same level, and we've had to work quite hard to get that message across," he said.
"Yes, it's all changing—but we've made major investments to make sure we're not going to get caught out," he concluded. "Whether it's date of birth or something else, we simply have to be on top of it. I'm not sure all of our competitors are."
In April this year, Ebi's Vantage Earth 60 proposition was included in Defaqto's top ten most recommended platform MPS by value for Q1 2025.
