IFA-owned ABS turns profit after first year
Dhanjal: ABS a “success story”
In the latest in our series tracking the fortunes of the new breed of alternative business structures (ABSs), we profile Bobby Dhanjal Wealth Management (BDWM), which is aproaching the first anniversary of receiving its licence and reports success so far.
The East Midlands firm of independent financial advisers business built a full-service legal arm from scratch, the first financial services business to make such a move. After just over a year in operation, it claims to have increased the average case handled across the business by 50%.
Leicester city-based ABS, Bobby Dhanjal Legal Services, known as BDLS, launched in March 2013 with three solicitors under Hardeep Kaur Mann, its head of legal practice and of finance and administration. It now has a home-grown trainee, with a second trainee set to begin shortly. The firm has 12 staff altogether.
When Legal Futures spoke to Mr Dhanjal in February last year, he was adamant the law firm would be staffed by trainees who had been first trained as business development managers (BDMs) attuned to the legal and other needs of local businesses. Both trainee recruits to the law firm have come from BDWM’s internal business training scheme.
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“It’s really worked well for us – and every time they are moving up [the ranks], we are creating more opportunity for further BDMs,” said Mr Dhanjal.
He said a number of Leicester solicitors’ firms had expressed interest in emulating the practice’s system of BDMs. “I think traditional solicitors are now looking at these BDMs and thinking ‘that’s what we should be doing’.”
Looking at the impact of the ABS on the business as a whole, he said it had enabled the firm to handle substantially larger cases. “It’s not only a success in profit terms, but it’s also been a success within our financial firm because it has led us to look at more complicated cases, where we need to involve solicitors and financial advisers working together, which increases case size capability.
“Our average case size within BDWM was around £1,200 before the ABS. Our average case size now is around £1,800.” Examples of where this has been advantageous included trust work and employment work, he said, adding: “It has also helped us understand individual client needs without… exposing them to a different law firm, so it’s been very good in that respect.”
Mr Dhanjal said the £60,000 or so of investment that setting up the ABS had required had already been recovered. “If you take that away, the ABS is in profit, so it’s looking very, very good”.
BDWM, which has some 30 staff, has also launched a ‘walk-in’ centre in Oadby, an upmarket town on the fringes of Leicester. It offers initial financial and legal advice, and Mr Dhanjal said that of the three or four client matters that resulted each week, three-quarters were for the law firm.
The centre was a “success story”, he said, and had led to enquiries relating to wills, litigation, and property. The firm’s wills and probate team was doing especially well.
Mr Dhanjal said a successful strategy to introduce financial advice and legal clients respectively to the other side of the business had been to hold evening events once a month. BDWM has held drinks evenings for existing and potential clients for some time and these had now become “part-legal, part-financial”.
Ongoing development plans include a scheme to cross-sell to clients of the ABS and vice versa, said Mr Dhanjal, in which BDMs on each side of the business can obtain enhanced “fact find” information from clients. “So we’ll have a litigation fact find, a wills and probate fact find, a property fact find, a family law fact find, and so on… We’re going to be asking extra questions to say, for example, ‘have you reviewed your employees’ contracts?’ A simple question such as that can then lead on to a cross-referral to the other business.”
Tags: ABS, Alternative business structures, independent financial adviser
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