In the last 18 months, 81 firms have joined Simplybiz from Sesame, with 17 moving across during this year alone, following the network’s closure at the end of March.
The network stated in the spring that it would no longer house investment advisers, blaming a Retail Distribution Review-inspired “natural migration” towards direct authorisation, which challenged the “basic premise of the network model”.
SimplyBiz’s client proposition director David Golder told FTAdviser that the last year’s worth of mostly negative headlines around Sesame have “accelerated the inevitable” and helped make up the minds of many appointed representatives to make the move to directly authorised.
“We’re finding that network firms often want to create and follow their own business model, as most are now comfortable with their relationship with the regulator, so if you can twin that freedom with support services, then that’s an ideal situation.”
He added that all those firms in the figures Simplybiz quoted are ARs moving to the group in order to work through their direct authorisations.
In July this year Aviva and Friends Life offered Sesame a combined £45m to cover adviser liabilities.
Aviva, which bought Sesame’s previous parent Friends Life earlier this year, offered the network £25m to cover liabilities they might have struggled to meet from their own coffers, which have been hit by a series of regulatory fines in recent years. The provider also promised a further £20m to fund the costs of past business reviews and restructuring the business.
Sesame has been hit by four separate fines from the regulator, including a £1.6m fine over panel deals for its new restricted model last year.
In September last year, FTAdviser revealed a Sesame past business review into pension transfers may mean advisers have to pay thousands of pounds relating to cases where ‘unsuitable’ recommendations were assessed to have been given.
This came in the wake of results in March showing the network had made a loss of £19m in the previous 12 months - double the loss recorded in the preceding year - in part due to the review.
Sesame Bankhall Group had already topped the Financial Ombudsman Service’s list of most complained about advisory firms over the last half of 2014, with 142 complaints between July and December that year.
Earlier this week Tenet revealed it has seen eight non-investment firms with 44 arrangers and 14 advisers leaving Sesame to join them since then.
John Cupis, managing director of mortgages at Sesame Bankhall, responded by saying he was “very confident” about the outlook for the mortgage business and felt his business was well positioned in the Mortgage Market Review world.
peter.walker@ft.com
