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BT dispels sign-on bonus myth

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By Chris Kennedy
  •  
3 minute read

As BT Financial Group looks to further grow its new BT Select offering, the group has moved to clear up misconceptions around the incentives financial advisers receive when they switch licensees.

BT Select managing director Phil Butterworth told InvestorDaily BT Select had grown from around 10 practices licensed under BT’s Magnitude licence to just over 50 in the 12 months since he was recruited to head the offering. Mr Butterworth expected that number to increase to around 60 by the end of this year.

Around 45 of those practices are licensed under Magnitude, while a further seven or eight remain self-licensed. Six of the 45 are former AFS Group practices.

Mr Butterworth said the AFS opportunity had been circumstantial; the six practices that joined have now been integrated for around six weeks and the group will not be picking up any further AFS practices, he added.

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BT will approach practices in the marketplace it knows to be of high quality and that would fit with the BT Select model, he said, but noted there are a lot of myths around so-called 'sign-on' bonuses.

“Some groups do play on the bonus side of things; we play on the cost recovery side,” he said.

“There are a couple of things we do to help a practice transition. [For example,] we have a dedicated licensee transitions team. It’s about the licensee change, not the platform or product change.”

There is always disruption and cost associated with changing licensees which distracts businesses away from focusing on growth, he said.

“You do some work around that and have a look at the potential associated costs and you try and map that out, and in most cases we would cover an element of that transition cost to that practice,” Mr Butterworth said.

“If you spoke to the practices they wouldn’t say that was a bonus; [they’d say] that was a cost recovery process. It is an important part of what a practice requires to help them get through it but it’s not the key thing.”

Communicating with the practice’s clients and service providers, training staff, transitioning software and other changes that come with switching licensees are more significant than a platform or product change, he said.

However, the key focus for BT Select, above growing the network, is around Future of Financial Advice implementation, with fee disclosure statements the main sticking point, according to Mr Butterworth.

There is a huge amount of work involved in getting all the right data in place, matching client data and making sure the original client value proposition is contained in the document

“That is a key plank of work and probably absorbed most of the focus… but if you get that right now and push through the pain barrier you’re going to be really well set up from then on,” he said.

BT dispels sign-on bonus myth

As BT Financial Group looks to further grow its new BT Select offering, the group has moved to clear up misconceptions around the incentives financial advisers receive when they switch licensees.

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