What should advisers expect from a distributor in 2026 and beyond? – Howes

There was perhaps a time when the relationship between a directly authorised (DA) advisory firm and its distributor could be judged against a relatively straightforward set of measures, with lender access, procuration fees, exclusive products, events and technical support likely to feature prominently on any list of requirements.

Those things clearly still matter, and I cannot imagine any DA firm suddenly becoming uninterested in the commercial terms it receives or the lenders/providers and products it can access, but I do wonder whether that traditional assessment now tells us enough about the value a distributor should be providing,

The businesses we work with are changing, the environment in which they operate continues to change, and it therefore follows that distribution needs to keep changing with them.

 

Being DA should not mean doing everything yourself

Choosing DA means taking responsibility for your own business and its regulatory requirements, but that should not mean believing every part of running that business has to be handled internally.

In fact, I would argue one of the strengths of the DA model is the ability to choose where you retain your own resource and expertise, and where bringing in specialist support makes far more sense commercially and operationally.

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That changes the questions firms might want to ask of their distributor, because lender access and procuration fees are only part of the equation when compliance consultancy, technical expertise, business development, training, technology and support with complex cases could all have a much greater long-term impact.

The question should increasingly be not simply what your distributor enables you to access lender-wise, and get paid, but what it enables your business to do better than you could reasonably achieve alone.

 

Commercial relationship transparency

There should also be transparency about how commercial relationships work, because DA firms should be able to understand not only what they receive from their distributor, but also whether firms are being treated consistently across the proposition.

At Paradigm, for example, our rebate approach applies regardless of a firm’s size, volume or value to us, and regardless of the commercial relationships we might have elsewhere, including protection. However, that raises a wider question for distribution about whether advisers always know how their own terms are determined.

If one firm receives enhanced terms because it produces significantly greater volumes, others also working with that distributor might reasonably ask whether their business is, in effect, helping to fund those better terms, and whether that arrangement has been made sufficiently clear to everyone involved.

 

No such thing as standard

There is also no such thing as a standard DA firm, and the requirements of a newly authorised business will inevitably be very different from those of an established brokerage employing a significant number of advisers and support staff.

Early on, compliance and consultancy might understandably be high on the list, while growth can create entirely different requirements around recruitment, supervision, management structures, processes and the development of people.

As firms become larger, some will build their own compliance and supervisory capability, but that should not necessarily reduce the value of the distributor relationship, because the support required can simply move to a different level.

We see this within Paradigm Consulting, where firms can move from requiring more direct compliance support towards needing specialist input for their own supervisors and senior teams, and it reinforces why distribution cannot operate on the basis that every member requires the same proposition throughout the life of their business.

 

Put the help into technical support

Technical support is another area where I think expectations should be high, particularly as borrower circumstances, lender criteria and the range of specialist solutions available continue to require considerable adviser knowledge.

A good technical team should obviously help an adviser find an appropriate route for a difficult case, but I think the real value comes when that conversation leaves the adviser better informed and more confident about dealing with similar circumstances in the future.

The same applies across protection, where individual client circumstances can require considerable expertise, and the objective should not simply be getting today’s case across the line but helping firms broaden their knowledge and the service they can provide.

That need for transparency should extend to protection propositions as well, because advisers should understand why a distributor has constructed a particular panel, what commercial arrangements sit behind it and whether enhanced terms elsewhere within the proposition have a cost attached.

 

Think about the business behind the adviser

Perhaps the biggest change required is recognising the distributor’s customer is not simply an adviser submitting a mortgage application, because in many cases, they are also an employer, manager and owner of a business they may ultimately want to sell.

Decisions about employing or engaging self-employed advisers, developing compliance resources, investing in technology, using artificial intelligence (AI), broadening the advice proposition and creating management structures can all affect what that business becomes.

A distributor should not be making those decisions on behalf of a DA owner, because maintaining that control is fundamental to the model, but it should be capable of helping them consider the questions and access the expertise required to answer them.

This becomes even more important as technology inevitably develops, because firms should not be adopting AI or any other system simply because it comes at a lower-than-average cost or ties a firm into a contract for other services without first understanding what problem it solves, how it fits their business and what regulatory responsibilities accompany its use.

 

Expect more, and ask for more

Ultimately, the real test of distribution, now and certainly into the future, may be whether the relationship remains useful as a DA firm moves through very different stages of their development.

What an owner needs when establishing the business will not be what they need five or 10 years later, while succession and eventual exit will introduce another set of considerations altogether.

DA firms should therefore expect more from their distributors than products, procuration fees and the occasional exclusive, but they also have a responsibility to ask more searching questions about the support available to them.

If distribution is doing its job properly, its value should be measured not simply by what it provides for the next mortgage case, but by the contribution it makes to building a stronger, better-run and more sustainable advice business.