John Miller, IFA and founder of Niven Financial, says he will never again join a network after being caught up in the collapse of several adviser networks in the past - and that other advisers should turn their back on the sector to remain competitive post-Retail Distribution Review.
In an interview with FTAdviser, Mr Miller said that belonging to a network adds another layer of costs that is prohibitive for advisers seeking to emphasise their competitiveness post-2012, and that it takes decision-making power out of an adviser’s hands.
Mr Miller was a member of Millfield Partnership, which collapsed and re-emerged as Money Portal, which also subsequently collapsed only to come back as Honister Partners, a subsidiary of the now-defunct Honister Capital.
After the collapse of Money Portal, Mr Miller founded Niven Financial in a bid to distance himself from the network. However, he was unable to leave Honister immediately due to the notice period.
Honister Capital went into administration in July of this year, with administrator Grant Thornton freezing all IFA bank accounts as a result.
On top of the issues that arise if a network fails, Mr Miller argued that in a post-RDR world of smaller margins, the cost of belonging to a network could actually push prices up as advisers try to pass the cost on to their clients.
Mr Miller said: “Advisers might want the security of a network but the problem is you have got other people making decisions and these decisions in my experience aren’t aligned to what the advisers decisions need to be.
“Shareholders make the decisions and advisers have to tag along.”
He added: “Networks affect the client because of the cost of being in a network. The client pays that cost. If you struck out what that model may cost you are dealing direct with the client and not paying a cost to a bureaucratic organisation with multiple layers of management.”
The full interview with Mr Miller, part of FTAdviser’s ongoing series on adviser readiness for the RDR, will be published later today.