Gavin Kingsley worked as an IFA in south Wales during the British Steel debacle and, here, he talks to Hannah Godfrey about launching a new firm located at the heart of the scandal that gripped the financial advice profession.
Sanctuary Financial Planning was launched by four directors - Gavin Kingsley, Gareth Shears, Shane Hyland and James Baker - just a few months ago in January.
Kingsley, Shears and Baker had all worked together at Newport-based firm Niche IFA before making the decision to start their own business, while Hyland joined to form the quartet after running his own directly authorised firm HRW Consulting.
Niche IFA - a business Kingsley describes as "a great firm to work for" - stopped advising British steelworkers after it felt overwhelmed by men wanting to transfer out of their defined benefit (DB) pensions. It also retained all its regulatory permissions when the Financial Conduct Authority (FCA) visited it.
Despite the heat from the regulator, however, Kingsley says the new IFA firm Sanctuary FP will carry out DB business, but he insists pension transfers will not be the focus of the firm.
"We did [apply for pension transfer permissions] because we are all pension transfer specialists - but we don't want to be like Niche," Kingsley explains. "That is Niche's main body of work, and it's what they are known for, and they have a very good reputation in that area.
"We want to have it in our kit bag as something we can do, but we want to be more holistic."
So what is it like being a pension transfer specialist in an area so adversely affected by poor pension transfer advice? For a start, Kingsley says, the firm faced heavy scrutiny from the FCA when it applied for regulatory status.
"I think [the FCA] was aware that Niche was a relatively big player in providing advice to British steelworkers," he says. "I think we were under additional scrutiny compared to others.
"We applied using compliance firms to give us support with the application and they said everyone was taking longer than normal, but our case appeared to be taking even longer still."
Kingsley says the FCA wanted to know how many DB transfers the directors had carried out at Niche IFA, how many of those they had advised to transfer out, and how many they had advised to act otherwise. "They wanted to know the ins and outs of every case, basically," he adds.
And it is not just the regulator that seems to regard firms in South Wales differently. As a consequence of the British Steel Pension Scheme saga, Kingsley reckons people are more wary of financial advisers in the area.
The Sanctuary FP directors have noticed a drop in people contacting them regarding DB transfer advice, for example, but they say the scandal has not deterred the firm from advising steelworkers.
"It's still a very hot topic within British Steel - I feel like everybody is still taking about pensions," Kingsley continues. "But, compared to this time last year, it has calmed down. I think to a certain degree it sorted the wheat from the chaff in the area."
Looking aside from the British Steel lens, the Sanctuary FP director reckons it is the only Welsh firm to have adopted a fixed-fee model on all investments valued up to £1m. The firm shows the fee models on its website and Kinglsey believes it is a fairer way to charge clients and leads to better client outcomes.
For example, he explains, if someone has an investment with an adviser for 20 years the charges they agreed at the beginning will be "vastly" different to what they are charged after those two decades of anticipated growth. But for Sanctuary FP clients, says Kingsley, it is a fixed fee for doing a set amount of work.
"Charging fixed fees means our relationship is with the client and not the money," he continues. "Publishing our fees online from day one puts down a marker and demonstrates our transparent approach to everything we do."
Kingsley says clients have responded well to the charging model.
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