Sesame sale could be halted ‘if new model works’

Campbell Macpherson said recent speculation that lacklustre demand from buyers could prompt Friends Life to shut down the network was wrong, as it had yet to see whether “a strong restricted offering” akin to St James’s Place could work.

Mr Macpherson, a former human resources director at Sesame, said the strategy could now be focused on building a “mini SJP”, as advisers’ views on restricted advice were softening in the face of growing compliance demands.

He said: “There are clearly bits of Sesame that buyers will find valuable, given the size of the network and its history, and although there are unknown liabilities to take into account. But there is clear value in building a strong network.

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“However, it needs to have a track record in order to prove that value, which will not occur for some time. Should it work out well, Friends Life could even keep Sesame and build it into a mini SJP.”

Sesame would not comment on market speculation but Stephen Gazard sought to reassure members that it was “business as usual” at the network.

In a memo sent out to members last week, seen by Financial Adviser, the company’s managing director said: “As a group we want to continue serving all types of consumers through all types of advisers, whether that is mortgages, protection, pensions or investments. That is our commitment.

“This is where we benefit from the size of the group. Having both large scale network and directly authorised adviser propositions is truly powerful and unique.”

Ned Cazalet, founder of financial services consultancy Cazalet Consulting, said there was a “world of difference” between the tight-knit partnership model created by SJP and the looser ties between adviser and network.

He said: “It would be almost impossible to replicate the success of SJP, a vertically intergrated paradigm where all investments under management are brought under the company’s rule. Advisers are not as tethered to their networks, particularly post-RDR, and going restricted will be a massive turn-off for many advisers”.