Tenet: ‘Network model is far from broken’

Tenet has dismissed the growing number of voices across the industry proclaiming the imminent demise of the network model as the Retail Distribution Review bites, saying those that “invest and commit for the long term” will continue to have a role.

Martin Greenwood, chief executive of the network and provider of support services to intermediaries, added that there is no requirement for networks to go fully restricted to survive despite rivals beginning to make such moves.

He said: “Unlike many of our competitors, Tenet remains a staunch supporter of independent advice and we are committed to supporting this model for those individuals with the desire and capability.

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“At the same time, we also continue to fully service advisers who have moved to a restricted advice model.”

Earlier this year, Sesame, the largest advisory network by number of members, revealed it was to move to a fully restricted model and that it would be launching a second ‘whole of market’ solution to sit alongside the more proscriptive existing ‘panel’ option.

Chief executive George Higginson said in a note to members that Sesame is considering a new proposition designed to meet the pre-RDR independent definition for investment and pensions, which required advisers to be free of any provider ties but did not require them to review every option available in the market.

Mr Higginson said a final decision on the new proposition had not yet been reached and that full details would be provided at the network’s annual conference in January.

The move came in the second half of a year that had seen much speculation on the future of advisory networks - and especially those that have independent members in a post-RDR world where the rules around independence have been tightened.

An 18-page monthly ‘observatory’ update compiled by research firm Matrix Solutions showed that 11 out of the 15 largest networks saw an exodus of registered individuals between December 2012 and July 2013, with overall numbers dropping by 669 RIs.

Earlier this week former positive solutions chief executive Jim Reeve stated that networks were currently operating ‘flailing’ business models and would not survive over the longer term as the adviser market becomes dominated by strong regional firms that have “control over their advice”.

However, Mr Greenwood said: “The network model is far from being broken for those distribution groups who are willing to invest and commit for the long term.

“We will... continue to develop our support service offering, focusing on the flexibility to tailor packages to an adviser’s specific requirements within their budget.

“With MMR on the horizon, we have a comprehensive package of support including running a series of webinars for mortgage advisers in the build-up to next April’s implementation, concluding with a test to enable them to assess their readiness. ”