Smaller networks are bucking the trend of dwindling membership as the bigger ones have lost sight of how best to serve their clients, Tim Newman, managing director of mid-sized network Sense, has said.
Mr Newman said joining a network should allow advisers to access a range of support services that allow them to better serve their clients.
He said, however: “The big, old networks have lost sight of the simple truth. They have become too complicated, too expensive to run and, in some cases, too reliant on doing dodgy deals to prop up their failing balance sheets.”
His comments follow data from Imas Corporate Finance that suggested the number of appointed representatives at networks authorised to give investment advice had fallen from 15,604 in 2009 to 12,319 in April 2014, coinciding with the RDR.
However, Mr Newman said Sense had seen an increase in CF30 numbers of 31 per cent since the advent of RDR.
He said smaller, modern networks had a clear focus and, as a result, Sense was able to work directly with the owners of the financial firms in the network.
He added: “Our directors work with advisers every day and have strong personal relationships with the owners of the firms in the network. We do not have our own platform or fund management operation and we do not have lots of skims, profit shares and other deals that deflect us from being independent.”
According to data from Matrix Solutions, in December 2012, 33.1 per cent of all CF30s in the UK operated as ARs. This was unchanged in May 2014, at 33.2 per cent.
The data also showed that of the 15 largest networks, 11 had increased their CF30 numbers over this period, with only four – Sesame, Financial, Whitechurch and Personal Touch – experiencing a reduction.
Matt Timmins, joint managing director of SimplyBiz, said more than 400 individuals had joined this year, many from networks where they were “sick to the back teeth of being told that they are either not commercially viable for the network, that they need to go restricted or some other similar nonsense”.
He added: “This is not true of all networks, and there are some good ones that are clear and consistent with their members, and have a loyal, growing and committed membership.”
