From Adviser Guide:
Picking a network part 1
Q: What is the alternative to joining a network?
Individual advisers have a number of options available to them.
The three main support structures that are currently in the market are to join a national IFA, a network or become directly authorised and buy support services.
Support service, network or national are all appropriate models to consider and one is not universally better than the other, according to Keith Richards, group distribution and development director of Tenet, unless you specialise in very niche markets.
Most importantly, Mr Richards said when choosing a support model, advisers need to be fully equipped with the facts about the choices they have available and to be brutally honest about their own firm’s capabilities, strengths and experience, especially in light of a changing regulatory landscape.
Philip Martin, proposition and marketing director of Openwork, warned going it alone was likely to get more onerous and more expensive.
For instance, he said sole traders and small businesses (whether restricted or IFA) won’t benefit from the reduced pricing that product providers will be offering to get on the panels of the biggest networks.
Nick Kelly, managing director of Sesame Bankhall Group, said in order to be directly regulated by the FSA you must have the capital adequacy and appetite.
As a directly authorised individual you take overall responsibility, which includes any regulatory investigations or visits, and if you choose this direction Mr Kelly said you would be well advised to seek the support of a quality service provider that can help you with issues such as regulatory compliance.
In this regard, he said you would be well advised to seek out one which is also authorised directly with the FSA as this will demonstrate robust quality, governance and controls.