We’re not here to go into that deal specifically, but we suspect there will be some AR firms who have moved across and, naturally, will be wondering if this is the right move for them – or if it’s just in the interest of the selling and buying propositions?
At the end of this – or rather the beginning, in terms of these AR firms – they need to ascertain whether they are in the right place right now, or whether they need to look elsewhere.
Pick the right partner for you
What we would say, particularly those who want to stay within a network proposition, is the absolute importance of picking a principal that specialises in the areas in which you specialise.
What we have seen a number of times over the years, is mortgage/protection networks established as something of an afterthought compared to the wealth/investment division of a business. An addendum to cater for those who might want to carry out mortgage business, but with little interest on the network’s part to actually cater specifically for them.
And, in such situations, we’ve seen consolidation all too readily, with these AR firms often ending up at different propositions, who again might not cater for their specific speciality, and are certainly not at the top of their game when it comes to these sectors. In that sense, mortgage/protection advisers/firms should choose mortgage/protection networks.
Think before you shift to DA
However, there might be a tendency to think – especially if this has happened to a firm multiple times – that all network models are the same. To express a ‘sod that’ feeling and decide to become directly authorised.
But, just as not every network is the right one for every AR firm – and this is certainly something we’ve dealt with in terms of meeting/speaking to certain firms that we are happy to say would probably favour a different organisation to ours – not every advisory practice is in the right place to move to DA status.
This is not a slur on any firm who might be considering this, but if 2023 has taught us anything, it’s about the work required in order to meet ongoing regulatory requirements particularly in a world where regulators and regulation do not stand still.
For AR firms considering a shift, they must understand what this is going to mean for them in terms of ongoing regulatory compliance, what they will be required to do, and what the cost of this is.
Now, at this point, third-party support service propositions may well raise a collective hand and suggest they are there to fill that ‘gap’, but again, firms will need to accept they are unlikely to get the level of support, resources, hand-holding, that they receive via a network proposition.
After all, it is the network that is responsible for the AR firm in this regard, while the DA firm is responsible for itself. We’ve talked to many DA firm owners who went down this route and were effectively provided with a ‘manual’ for compliance and told to get on with it.
For AR firms of many years this is going to feel very different and therefore they need to understand what they are getting themselves into, and whether the firm is in the best place possible, to be able to cope with moving to DA status.
Select a specialist
It might well be that instead of such a shift, the firm simply needs to understand what it is as an advisory concern, what it specialises in, where it wants to be, what compliance support it needs, what lenders/providers/products it wants access to, and at this point, work out which network is the best option to deliver for them.
That might not mean a behemoth of a network but what it should mean – particularly for mortgage/protection advisers – is a specialist in those areas, committed to a focus on their individual adviser and firm-wide needs, who understands everything about that sector, what’s required to work in it, and works collaboratively to benefit all.
Firms should not leave it to others to determine who that network should be. Match your firm to the network, and be willing to look elsewhere if you currently feel that match is wrong.
