Speaking after it was announced that Sesame Bankhall Group posted a £19m loss for 2013, the firm’s executive chairman said its board would discuss the future direction of the school later this month.
He said: “The FCA’s tougher rules on inducements has a direct effect on how the financial adviser school operates as it is sponsored by providers.
“We believe it’s a terrific service and it’s currently ongoing, but as it falls within the remit of the inducement rules we will have to re-evaluate it.”
FAS was launched by SBG in 2011 in an attempt to attract more people into careers as advisers and enrolled its 100th student last October.
The FCA published an 18-page finalised guidance paper on inducements in January. Chief executive Martin Wheatley said he was concerned that some firms were circumventing rules on inducements by offering advisers other services, such as IT or consultancy assistance.
The paper called on firms to review and if necessary revise their existing arrangements in light of the guidance, and warned that both the provider and adviser could be liable for action if a payment was not compliant with principle eight of the conduct of business inducement rules.
| £19m loss ‘a legacy issue’ |
Mr Cowan said SBG’s £19m loss should be treated as a one-off “legacy issue” for the network, and pledged to “sort this business out” in the wake of the losses, which included a £6m FCA fine. With a strategic review into the future of the business by parent company Friends Life showing no sign of completion, he declined to comment on SBG’s future, but did say: “This is a matter for Friends Life and its chief executive Andy Briggs, but as far as I’m concerned we are keeping this business together and moving forward together.” |
Adviser View
Alun Davies, chartered financial planner for Sesame appointed representative firm The Cheshire Partnership, said: “It would be a shame if Sesame had to curtail FAS because of these rules. You only have to look at the demographics of the industry to see how important it is to bring forward new blood, and give them the skills and qualifications to progress.”
