Adviser network Sesame has announced it is to move to a ‘whole of market restricted’ model in 2014. The move comes due to the FCA’s “tougher and more intrusive” regulatory approach, it says.
The announcement comes after a difficult year for the network. In June, it was fined more than £6m by the regulator for two separate incidents.
It was charged £5.8m for failings in the systems and controls governing the oversight of its appointed representatives, and a further £245,000 was levied for failing to ensure suitable advice was given to its customers, specifically relating to Keydata life settlement products.
The change in model further fuels the debate as to whether there is a need for network memberships at all any more, and whether the restricted or independent label is enough.
Alistair Cunningham, financial planning director at Surrey-based Wingate Financial Planning, said, “I think whole of market restricted is a legitimate title if you’re restricting the type of products but not the provider.”
But not everyone agrees. Pete Matthews, managing director of Penzance-based Jacksons Wealth Management, said the label is “nonsense”.
“It smacks of the classic tied adviser technique saying, ‘we’ve searched the whole market and narrowed the available choices down to a panel of best-of-breed.
“That all sounds very good but is rarely as good as it sounds. Unless the methodology for choosing the panel is transparent, it is meaningless. It also muddies the waters for the client in no small measure,” he added.
Kim Barrett, senior partner at Barretts Financial, said he is not sure if networks are still relevant. “Increasingly under RDR, an adviser needs to be able to determine what they can, cannot, will or will not do, and what they charge.
“Without the outside influence of someone telling them that what they are doing does not adhere to the standards of a network.”
He added, “As advisers become more professional and do not wish to have their business model influenced too strongly by outside sources, networks will need to adapt or be forced out of business.”
