Third, and perhaps most significantly, with the number of advisers set to decrease, the overall target market for network business can also be expected to decrease. The truth of the matter is that only the networks which are able to adapt to the demands of the new regulatory landscape will survive and flourish post-RDR.
Third, and perhaps most significantly, with the number of advisers set to decrease, so too will the overall target market for network businesses. The truth of the matter is that only the networks which are able to adapt to the demands of the new regulatory landscape will survive and flourish post-RDR.
With all the challenges presented to networks by the implications of the RDR, there is always a positive solution for those with a forward-thinking approach and the right amount of perspective. A positive take on the situation is that while network models will be required to adapt to new commercial restrictions, they will also be able to find fresh opportunities for growth and expansion in the new year.
A keen eye for new opportunities and a fresh perspective are both vital to the success of any network business post-RDR. It may seem that all these regulatory pressures are inhibiting business growth, but in fact they are also opening the door to new possibilities. One such example is the pressure on lenders to know a lot more detail about who is distributing their products as a result of the RDR.
This challenging aspect of regulatory change may seem like a dilemma, but could in fact work in favour of a network business. Lenders may be forced to rely more heavily on an ‘approved’ representative arrangement with a trusted network where the ‘control environment’ and general checking of advisers, principals and firms is standardised. Lenders are faced with many hundreds of firms and thousands of sellers to ‘know’ and therefore may start to make some hard decisions as to who they distribute products through. Early signs we have seen are that lenders certainly find the referencing, training and supervision monitoring that the assigned representative model offers a comfort as they set out on this long road.
