Data compiled by Paul Day, managing director of Network Consulting Services, breaks down how the make-up of networks has changed during the first half of 2023. The analysis is based on the Financial Conduct Authority’s definition of what makes a network, and its register.
The data revealed that Stonebridge saw the biggest net gain in AR firms over the first half of 2023. Over the first six months the network grew by a net 26 firms, which works out at an increase of 4.2 per cent, and means it remains the fifth largest.
This put it ahead of HL Partnership and 2Plan Wealth Management, which each gained 21 firms on a net basis.
At the other end of the scale, Tenet saw the biggest outflows, falling by a net 29 AR firms, followed by Openwork which dropped by 26.
Looking at percentage growth, TMG Direct was the standout performer in the first half of 2023. It gained a net 10 AR firms, which worked out as a jump of 35.7 per cent.
Positive movement for networks
Day noted that in the first quarter of the year, the main networks saw nearly 100 more firms leaving than joining, with speculation that this “could be down to the implementation of the AR regime and perhaps additionally a result of preparation work for Consumer Duty”.
However there was something of a turnaround in the second quarter, with that differential dropping to 60.
He added: “There is still plenty of movement of advisers and firms looking for a home or changing principal, although those specialising in mortgages have been distracted from their plans to move due to the level of work caused by interest rate changes and product removals. From our own conversations there are an encouraging number of advisers either entering or re-entering the marketplace.”
Understanding what brokers want from their network
Rob Clifford (pictured), chief executive of Stonebridge, welcomed the figures, noting that recruitment was a “crucial component” of Stonebridge’s strategy.
He pointed to the firm’s investment in support staff and technology as drivers behind its growth, and emphasised that existing AR firms play an important part in the development of new functionality of its platform, Revolution.
Clifford continued: “We work with AR firms in a unique way, by focusing on what they need, devising and supporting their growth plans, and being flexible if they want to leave for good reason. We don’t have an onerous contract as we strongly believe AR firms should receive the service and support they expect when joining, and not feel locked in for years on end, as some other network principals require.”
Jonathan Needham, managing director of TMG Direct, said a common frustration among brokers considering their network options at the moment is technology.
He noted that brokers are often put off by being forced to use a certain CRM system and functionality, which can leave the adviser spending even more time on back office tasks. On the other hand, they may be attracted to networks where the CRM system can work with other platforms and help save brokers time.
Needham argued that offering a personal touch is also important for ambitious networks. “There are some fantastic networks in the UK, but a lot of feedback comes back to me that the personal touch has been lost. Advisers feel like they are just a number, there to add to the bottom line.”
On the ball with Consumer Duty
Brokers were clear that networks have an important role to play when it comes to preparing for the Consumer Duty regime.
Richard Campo, founder of Rose Capital Partners, said his network Primis had been “on the ball with this” from early on, adapting as much as possible ahead of the deadline so that there isn’t a “cliff edge event” for ARs to worry about.
He continued: “We have been kept well informed and in the run up to new rules coming into place there are frequent emails, webinars, meetings and people to talk to. All of which means I can concentrate on what is important – my staff and clients – as if I had to navigate my way through this it would be a huge distraction and would come at the detriment of the ‘day job’.”
This was echoed by Scott Taylor-Barr, financial adviser at Barnsdale Financial Management, who said going through the sheer amount of documentation issued by the regulator would have “paralysed” his business.
He continued: “Having suitably trained and qualified people at The Openwork Partnership do that for me and then deliver the required changes in systems and process to ensure meet the new standard has been essential, as it has allowed me to maintain my focus on delivering quality advice to clients in a very turbulent and fast-paced market.”
Mortgage Intelligence was praised by Joe Stallard, who said the network’s support had been “more important than ever” over recent months.
“They’ve been excellent with communications throughout, especially with regard to Consumer Duty. To help us acclimatise to this, they’ve created a hub of information and multiple notifications of process changes,” he explained.
