We asked three key figures from the industry, what makes an adviser attractive to a network?
Gemma Harle, managing director of Tenet Lime, says that the cost of investment needed to bring a new adviser into a network means that brokers with a stable history will be preferred.
Paul Shearman, director at Openwork, thinks that brokers need to prove a good match with the business workings of a network if they are to be taken on board.
Mark Graves, director of Pink network, believes that brokers need to be asking the right questions to be considered as a new recruit.
Gemma Harle, managing director of Tenet Lime:
The regulatory focus of the last decade and credit tightening of the last five years have introduced supply side considerations to the UK intermediary market that have fundamentally changed the way networks look at their distributors.
Networks and brokers have a duty of care to consumers, lenders and each other that means quality and professionalism have replaced quantity as the prime consideration.
In this context, quality is assessed and derived from advisers’ previous histories, qualifications, and commercial success as well as third party and regulatory references.
New advisers represent a sizeable investment for a network which might not see a return on this commitment until after the first year owing to factors such as the cost of acquiring, inducting, referencing, agency set up, approval of compliance documentation etc.
Advisers with a history of chopping and changing networks are a less attractive commercial proposition.
But other factors are also important. An adviser who maintains a broader business mix is likely to be a better prospect in the longer-term.
This is not a euphemism for being a bigger business. Large firms are not automatically the most profitable for networks due to the level of support they may require.
Ultimately, it is about matching the right network proposition to the right adviser’s proposition.
Paul Shearman, director at Openwork:
What does the ideal broker look like? To a greater degree than almost all other competitors, Openwork is a community of like-minded businesses – or as we call them Enterprises.
Together our Enterprises are Openwork’s majority shareholder. Any new recruits therefore need to integrate culturally and enhance the standing and reputation of the network.
Openwork’s recruitment standards reflect this need for alignment with our overall business strategy – we aspire to recruit high quality, productive individuals and businesses to create a national network of advisers that clients trust.
Openwork’s Recruitment Standards also reflect the relevant FSA rules and guidelines and treating customers fairly. Critically, this will include:
1) Honesty, integrity and reputation
2) Competence and capability
3) Financial soundness
We believe our approach is commercially appropriate.
However, we do recognise that these standards will inevitably exclude a small proportion of individuals who would or will be appointed by some of our competitors.
More broadly, we are looking for self-motivated individuals, ideally with previous industry experience, who have access to an existing client bank or an ability to attract new clients.
Demonstrating a willingness and/or track record to deliver holistic advice to clients – at minimum across mortgages, protection and general insurance – is also an essential characteristic of our model recruit.
Mark Graves, director of Pink network:
There is such a wide variance between network strategies that any adviser will ultimately find a home somewhere, but if you’ve been taken off a lender panel or on the receiving end of lender warning letters you are going to find it very difficult to move networks.
From a Pink perspective an adviser has to have a robust business model and pass our financial stability test which is very similar to a lender’s AIP.
We look for advisers who have the right attitude to succeed, are willing to learn and who will promote the image of Pink in a positive light.
They don’t have to have experience as we are happy to train people; if they have no experience at all we would possibly encourage them into one of our top accounts who would help to train and manage them, have regular 1:1 meetings and teach them best practice in their sales methods.
What we are not interested in is an adviser whose first question is “What are your fees?”. What we look for are advisers who want a meeting to discuss how we can help them to grow their business and increase their income. What they should be asking is: “What can your network offer me to help increase my income.”
I make no apologies for saying an adviser is attractive to me if I believe it can enhance our network and increase our income, as quality networks are made from quality advisers.
