RDR was the catalyst for Sesame changes: Cowan

RDR was the catalyst for Sesame changes: Cowan

The closure of Sesame Bankhall Group’s appointed rep network for wealth advisers is a natural progression from the RDR changes, John Cowan has said.

The executive chairman of SBG said: “The network model has been challenged over recent years, especially with RDR.

“It created a whole lot of business models for those in wealth management and we came to the conclusion that our one-size-fits all network model did not work any more, from a risk or a cost point of view.”

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He said many ARs had been moving to become directly authorised though Bankhall since SBG announced in 2013 that it was adopting a restricted model, and expected this to continue.

“The greatest challenges was conducting a review against a changing background. We’ve had the pension reforms, the MMR, the forthoming change of ownership and with all the rumour and speculation in the market, it was a challenge to keep people focused and to run SBG as business as usual”, he added.

He also stated that there were no plans to change the SBG or Sesame brands, and said he would remain in his role. Mr Cowan said he had been asked a year ago to develop the strategy within SBG and Friends Life. He has also been to lead the business, and said “I plan to continue doing that and am very excited at the prospect”.

Back in January 2014, Campbell Macpherson, former human resources director of pre-merger Sesame from 2003 to 2006 said Friends Life had three options for SBG: make the current structure work, find another buyer or break it up and sell its constituent parts.

At the time of the Barclays Capital review, market speculation predicted that the Bankhall support services group was the most likely to be sold off.

However, Mr Cowan said that the Barclays Capital review into SBG back in 2013 had “nothing to do with this update”, and nor has the Aviva merger, which was approved last week.

He said: “We had to explore all the options and despite the speculation in the market place, we came forward with a business plan and we do believe in this. We see a trend towards the wealth management part of the industry being either DA or belonging to separate businesses.”

According to latest figures, there are approximately 1000 firms in the AR network. Of this, roughly two thirds are mortgage, protection and GI advisers. One third are designated investment firms, or wealth management firms, meaning there will be roughly 600 individuals affected by the changes.

PMS and Bankhall will remain and will see the range of services expand over the next few months.

Under the new arrangement, AR wealth advisers can choose to become directly authorised by Bankhall, make their own arrangements to join another network or national firm, or take up SBG’s offer to transition to a new network.

Mr Cowan said: “We are in talks with another advisory group to help facilitate a smooth transition for those firms who would prefer this route.”