True Potential has said its new network proposition will defy the struggles experienced by rivals in the space such as beleaguered sector giant Sesame, through the increased scrutiny of advice and sales afforded by its fully online model.
Earl Glasgow, managing partner at the company’s adviser arm True Potential Wealth Management, told FTAdviser the firm does not consider the new business, True Potential Associate Partners, to even be a ‘network’.
True Potential Associate Partners, which the firm has described as a “modern way of working that’s based on the current True Potential Wealth Management business model”, launched last week.
Unlike a traditional network model in which adviser maintain their trading style, partners at True Potential Associated Partners will be “dual-branded”, Mr Glasgow said, and will be subject to more post-sale checks in line with the way the advice business operates.
Mr Glasgow said the additional scrutiny would include automatic checking of all “high-risk” investment switches and “pre-checking” of sales to older clients.
“We check all investment switches, high risk with a reduction in yield of more than 0.5 per cent and pre-check clients who are over 75. We are not checking to say you can’t do it, but clients understand the costs [of getting it wrong] justify this.
“We look at submissions before advisers are paid by using cloud technology; we can check 100 per cent or none of it.”
As an example of how the new system would work, Mr Glasgow said True Potential Wealth Management had checked 2,500 fact finds in the last month alone.
He added the “only reason we are called a network is because we have ARs”, saying there is “nothing wrong with a network except that everyone is struggling”.
Mr Glasgow explained one of the primary issues with networks is that ARs “sit away” and it is only when networks check the fact finds “months down the line” that issues come to light.
“For example look at the trouble Sesame got into. The regulator said how do you know clients are getting their documentation so they have to call all their clients and check this. We can provide this on a personal website for each client.”
Earlier this month, Sesame Bankhall was revealed to have posted losses of £19m for 2013 on the back of increasing redress liabilities for past sales, and especially a past business review that focused among other things on past pension transfers.
Many networks and national firms, including Sesame itself, have gone restricted post-Retail Distribution Review in a bid to simplify their offering in the face of tougher compliance rules and limit ongoing liabilities.
Mr Glasgow added that True Potential Associated Partners operates by “putting technology in front of clients”.
“If you become a client of ours the first thing we would show you is a private portal which will have your documents, goals and you can link everything into it - it has real time valuations.”
He said the new proposition is that the onus is on clients to check their own documents via the online portal unless they sign to say they wish to use an alternative system, such as paper-based checks.