AJ to offer advisers buyer of last resort option

More details on Armstrong Jones' plans to help advisers.

Tuesday, February 16th 1999, 12:00AM

Fund manager Armstrong Jones could well end up owning financial planning businesses under its new plan to build strategic alliances with advisory firms.
As reported earlier AJ is looking to build up strategic alliances with financial planning firms to help it sell product, and to help advisers add value to their businesses.
While AJ intends to provide advisers with support in areas such as marketing, administration and technology it will also be offering a buyer of last resort option.
Under this arrangement AJ will buy firms from advisers wanting to exit the business, if another buyer can't be found.

If AJ has to exercise this option it then has options such as on-selling any acquired firms or putting a salaried manager in to run the practice.
Wealthy and Wise principal David Greenslade will be contracted to run the alliance for AJ.
He says going to a full franchise network was ruled out because of compliance issues.
He says firms joining the alliance will remain independent and operate under their own names to start with.
At the outset the group will be like a "collective" until they build up some commonality in areas such as administration and marketing. Then in "12 months to two years there will be some form of common brand".
"A common brand...is quite critical," he says.
Advisers who sign a licensing agreement with AJ will be required to put 55 per cent of their unit trust business into AJ's Private Portfolio Service master fund.
Greenslade has confirmed he is in the process of selling his business to fellow adviser Darryl Edmonds.
He says once the business is sold he will be consulting to AJ, but working from the Wealthy and Wise premises.
His view is that it is important to stay close to the advisory business and Wealthy and Wise will, to a degree, be a "test site" for trialling out new ideas.
"If you're going to add true value you have to be at the coal face," he says.
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