The group, comprising Honister Partners, Burns-Anderson and Sage Financial Services, has appointed Grant Thornton as administrator. Direct-to-consumer business Willis Owen is unaffected.
Young writes…
“It was a sad day for all of the advisers in Honister, Burns-Anderson and Sage.
“The prospect of being unable to make a living and potentially losing your pipeline will tempt many advisers to jump at the first offer they receive from another network.
“And there will be lots of offers! Every network recruiter will be dusting off their prospecting database and hitting the phones hard. So, what should advisers and firms do?
“Firstly, I would encourage everyone to assess their options carefully.
“All networks are different and it’s vital to ask some key questions before deciding to join them.
“Here’s a few of the key questions I would ask:
- How profitable is your network? (insist upon seeing the accounts)
- How much regulatory capital do you hold and what is the FSA requirement?
- How RDR ready is your network?
- How many advisers do you expect to lose and what will the impact be?
- Is your network under FSA investigation?
- What is your exposure to Arch Cru, Keydata, UCIS or other product investigations?
- Do you have full PI and when is the next renewal?
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- What is your supervision process? (file checks, visits, one-to-ones)
- What technology platform do you use?
- Can my data be transferred across and at what cost?
- What is your stance on independence?
- What training support do you offer?
- How will you support CPD in 2013?
- Who owns your network? (and what influence do they wield?)
“In my experience, ARs of failed networks only focus on two things:
1. How quickly can you authorise me?
2. How much will you charge me?
“Although these factors are important, the list above are more so if you want to make sure that you find the right home for your firm. You should speak to several networks and then make an objective decision.
“I also have two pieces of advice to offer to directors/owners of AR firms:
1. Remember to keep your advisers informed. There is a risk that advisers may make their own arrangements (and some recruiters will encourage that).
2. It is possible that parts of the business may yet find a buyer. Don’t rely upon it but keep an open mind if there is an opportunity to retain pipeline and trail commission by staying where you are.
“Finally, I hope that all of the clients and advisers impacted by this sad announcement do not suffer in the long run. I also hope that the advice community is not burdened by yet another call on FSCS.”
