No obstacle too large for the smaller practice

Michael Kavanagh on how one firm entered the market

Wessex law firm Parker Bullen may be modest in size, but not in its ambitions when it comes to financial services.

When the firm sat down to review its strategy last year, a decision was made to grab the issue of financial services by the horns.

The firm was determined to provide a comprehensive range of financial services for clients through its offices in Salisbury and Andover.

But, while larger firms have been opting to buy in expertise and set up in-house life and pensions and investment management operations, that option seemed to be beyond the scope of the eight-partner firm.

So the firm's private client department, headed by Robert Sykes, looked outside the firm for a partnership with an established across-the-board financial product provider to develop the business.

The result is a deal with financial services company Fraser Smith, which itself has been targeting solicitors and accountants practices to help them build life and pensions and investment management business

"We wanted a source of advice in both specialities [of life and pensions and investment management]," says Malcolm Morton, practice manager at Parker Bullen. And generating a single point of contact for both types of financial services outside the firm has obvious advantages for both clients and the firm itself, says Morton.

"Clients often have both needs, " says Morton. "Fraser Smith has the expertise. That matters where clients need the best."

Parker Bullen' s arrangement with Fraser Smith allows for both fee-based and commission-based dealing, with both options clearly pointed out to the client, and offers asset management services.

For portfolio management services, the charging levels of Fraser Smith are keen, says Morton. Rather than the typical one per cent, the firm charges a typical three quarters of a percent with a quarter per cent being rebated to the solicitor.

But while the confidence of Parker Bullen in the performance of Fraser Smith's investment services is crucial, so too is the "culture" of its partner in financial services.

"We are very concerned that the professional investment advice given is in the traditional professional approach to doing business," says Morton. "The referral must be made by a partner or decision maker, and we make the introduction. This is followed by an introduction to one of their financial consultants who works alongside the lawyer for the client."

A key element in the arrangement is to avoid any hint of a hard sell in dealing with clients.

"Financial services has, for obvious reasons, got a dreadful reputation. We need to know our clients are in contact with the right people," says Morton.

Economies of scale may militate against some firms developing their own in-house financial services divisions. But Morton is clear that firms must be rigorous and pro-active in giving clients access to investment advisers.

The main competition for complacent practices may come from within the profession, says Morton. "My belief is that business will be lost to lawyers providing that overall level of competence and service."