Blacktower managing director John Westwood said the network, known as Nexus Global (NXG), will enable firms to keep their branding and identity, while taking advantage of Blacktower’s established licencing and compliance structures.
Working alongside Westwood in developing NXG has been Paul Brown, chairman of WorldWideBroker, a Netherlands-based cross-border advisory firm, who is also on NXG’s management committee.
Although the Blacktower Group is regulated in the UK by Britain’s FSA as well as, elsewhere, by Gibraltar’s Financial Services Commission, Nexus Global will be overseen by the Gibraltar regulator, Westwood added. It is also planning to offer members licensing for both the EU Market in Financial Instruments Directive (MiFID) and Insurance Mediation Directive (IMD).
Two companies have thus far signed up with Blacktower, both based in Spain: Speed Financial Solutions and RS Financial Services, both of which are recent start-ups, while a further five companies are in the pipeline, according to Westwood, who said he hopes to have a network of between 10 and 15 affiliates by the end of the year.
“Through Blacktower Financial Management International’s licensing, NXG members will benefit from the ability to passport their services into [other] EU member states as appointed representatives of Nexus Global,” he said. BFMI currently has passporting approval for most countries, including the UK, and will extend this as its members require.
“There are many IFAs out there wishing to expand, professionalise and protect their businesses. However, firms are often unwilling to link to third parties, for fear of diluting their ownership and hard-earned brand identity.”
News of Nexus Global comes as another Europe- and expat-focused advisory organisation, Cyprus-based 3D Global, has unveiled plans to create its own IFA network which, in a manner similar to Blacktower’s, will offer other EU firms the ability to operate under 3D’s European MiFID and IMD licences. (See profile in June issue of International Adviser magazine, here.)
Advisory networks have long been a feature of the UK financial services landscape, where examples include Sesame Bankhall and compliance-support provider SimplyBiz.
Nevis-based Inter Alliance WorldNet, which is now defunct, claims to have been the first network to cater for offshore intermediaries when it was set up in 1996, and a successor company, Inter Alliance WorldNet Insurance Agents & Advisors, now operates within Europe out of Cyprus.
London-based AES international has also been establishing a global presence since 2003. It now has some nine locally-established branches in Europe that are authorized to conduct investment and insurance business throughout the EU, according to managing director Sam Instone.
Westwood believes such networks, which typically are financed –franchise-style – by a fee based on a percentage of each member firm’s gross turnover reportedly ranging from 17% to 30%, will become more important “as regulation becomes more complex and onerous” in Europe, “and regulators are reviewing IFAs and structures more critically than ever before”.
He declines to say what Blacktower’s fee structure is beyond that it is “more competitive” than the industry norm.
Not just regulation
Although the regulatory/compliance element of the advisory business may be the raison d’etre for NXG, Westwood does not see its remit as stopping there.
It has plans to help its member firms boost their efficiency and skills by providing training and development modules, back-office systems, newsletter templates and cost-savings options. What is more, says Westwood, “professional indemnity cover via a network is significantly cheaper” than when sourced independently.
