Yesterday, the non-institutionally-owned dealer group announced that Valant Capital had been created to provide platform, investment and insurance solutions to its advisers.
The story generated concerns from ifa readers, who claimed Synchron was no longer considered non-conflicted.
In response, however, Synchron and Valant Capital director John Prossor said the new company is not owned by Synchron and there are no incentives for advisers to use it rather than other platforms.
Valant Capital is owned by Mr Prossor, Synchron director Don Trapnell and Valant Capital director John Morrison.
“Synchron is not prescriptive about what platform our advisers use. They are welcome to continue to use the other platforms and there is no incentive either way,” Mr Prossor told ifa.
“This is just an additional option which gives them the ability to provide a competitively-priced platform with model portfolios in it, if they want them. Does that make us vertically-integrated? Not at all.”
Mr Prossor said the decision to create Valant Capital came in response to adviser demand for affordable model portfolios. It is also intended to serve a range of Synchron advisers who want to offer more than just risk advice.
“At a management conference in October last year, our state managers were saying that we’ve got authorised representatives asking for model portfolios. So when we went to see where to get model portfolios, we found they were very costly,” he said.
“Synchron is an extremely successful licensee in the risk area but is still perceived as a risk-only licensee. But that’s far from the truth; we’ve put on a lot of full-service financial planners in the last four to five years.
“Partly, this is addressing that – to show that we are more than only risk,” he said.
Valant Capital, rolled out this month, has so far seen traction with a small number of advisers, Mr Prossor said.
The SMA will be a white labelled version of someone else SMA BUT they will get some margin from that as well. This is fairly common in the market. they are best to be open about the structure as opposed to trying to defend against a perception of skull duggery!
Synchron is predominantly owned by the same 3 people . Amazing , will be very interesting to see the MER of the SMA placed on the approved list, and managed by 3 people with almost no funds management experience.
Of course Syncron advisers who recommend the platform will have to be able to demonstrate that they have complied with the ‘conflict priority rule’ because the platform is ‘related’ to them through the ownership of the platform by Messrs Prosser and Trapnell, who are ‘related’ to Syncron (RG175.363-378) and presumably additional revenue will be generated for the platform and ultimately Messrs Prosser and Trapnell.
I think that these directors may need a bit of a refresher course on what may considered related parties. How can they claim that they are not vertically integrated with 3 common directors? Don’t mind the model, just the hypocrisy by so called independents. As for there being no competitive offer in the marketplace? Pull the other one; it plays “money – that’s what I want”. Just be honest. You want to make a manufacturing margin on the back of your advice and distribution position.
Keep digging Syncron….
This is just another way to extract cash from your advisers for a service that should be provided to your advisers as part of your dealer services.
Model portfolios are not cheap but they are not expensive either, in the scheme of things the amount of $$ that could be invested into them. Instead of having your advisers trying to be investment guru’s how about trying to de-risk your license by providing and encouraging your reps to use model portfolios. you might even save some money on PI insurance premiums!