From Adviser Guide:
Picking a network part 1
Q: What is a network?
A network enables adviser firms to give advice on financial services business without being authorised directly by the FSA.
The network deals with the regulator and other bodies such as the Financial Ombudsman Service (Fos) and Financial Services Compensation Scheme (FSCS) on your behalf, making sure your business is compliant with their rules.
On top of that, Nick Kelly, managing director of Sesame Bankhall Group, said there are a wide range of additional, added value services available from a network.
However, he said the value, range and quality of these services vary widely across the market and depend on the individual networks concerned.
A quality network should offer a framework, guidance and effective supervision for firms, enabling them to operate as individuals.
Keith Richards, group distribution and development director of Tenet, said taking the majority of the regulatory burden away from individual firms will provide them with increased confidence that they are operating to the required quality standards.
Sharing regulatory responsibility with the network ensures that the full impact of regulatory risk is otherwise mitigated and protects the adviser to a greater degree, he added.