04 November 2014 by Simon Whitney
Having ceased trading temporarily after his network collapsed, Simon Whitney is ready to rebuild income at Montpellier Asset Management, having taken his time to prepare it for the RDR and put the right team in place.
Simon Whitney, former young farmer and managing director of Montpellier Asset Management, is carefully nursing his small, boutique wealth management firm back to health after a tempestuous year in 2010.
The business is on the road to recovery after it had to stop trading for several months due to the collapse of its network, Alpha to Omega (A2O). Following that Whitney took time to prepare the ground for the retail distribution review (RDR).
Montpellier, named after the picturesque area of Cheltenham where it is based, has been running for 12 years and offers holistic wealth management and specialist estate and tax planning to clients, which include many small business owners and farmers.
It went through various guises before joining the A2O network as an appointed representative in 2004.
Things were going well and the firm moved to a fee-based proposition in 2009. However, in January 2010, the network went into administration due to compliance failings over a number of unregulated collective investment schemes (Ucis) used by one of its members.
‘The problem with a network is you never know what others are up to,’ says Whitney. ‘We had no community there. Unbeknown to us, the network failed to monitor [a rogue member] undertaking Ucis investments.
‘At that time, we did not have any exposure to Ucis, so the Financial Services Authority (FSA) allowed us to reauthorise directly. We had a standard application process [to become directly authorised] which, due to the backlog of applications, took from March until November 2010 to be processed.
‘All our fees and commissions went through the network, and once it goes into administration, everything is frozen so you lose your income overnight. I lost both my employees to head hunters. We had to go out and find new staff again.’
Time for business planning
This gave Whitney plenty of time to plan, however, and choose new partners, such as back office provider True Potential.
Having previously advised both corporate and private clients, he decided to refocus on the personal side, working with other professionals and offering an holistic approach, including tax planning.
Last year Whitney took on Spencer McPherson (pictured to the right) as a technical consultant focusing on tax-efficient investments and estate planning, and Elizabeth Langford as office manager.