Sesame has written to its appointed representatives promising a variety of benefits, including continuation of trail commission income, if they switch to sister company Bankhall or the as-yet unnamed ‘preferred partner’.
The network has offered to
• keep trail commission uninterrupted, suggesting departing advisers might see income frozen;
• provide support with novating recurring income to the new entity
• cover Financial Services Compensation Scheme interim levies;
• give up to six months to return client files; and
• go pro-rata on Financial Conduct Authority fees to ensure no double charging.
This follows last week’s news that Sesame was closing the wealth management side of its network. ARs wishing to stay can choose to become directly authorised through Bankhall, transition to a new ‘preferred’ network, or reduce permissions to mortgage and protection only.
Advisers could also eschew these options and go direct on their own terms or move to a rival network. It is not yet known which network is the preferred partner, though industry speculation has centred on Intrinsic.
Last week it was announced that Foster Denovo had signed a referral deal with Sesame parent company Friends Life, for clients seeking to utilise new pension freedoms.
Several network members spoken to by FTAdviser said they would rather opt to go direct with Bankhall than join another network or move to the new partner network, which is due to be revealed by the end of this month.
When a firm leaves Sesame it typically freezes commission accounts for around three months to collect client files and settle any liabilities.
In the message to ARs sent yesterday (7 April), Stephen Gazard, the group’s managing director, said that while he appreciated there were other options available, “it is simply not feasible for us to provide you with the same level of support on the same terms as we are able to deliver through our preferred routes”.
He added that the overriding objective of the “AR wealth partner solution” is to smooth the transition and lessen any disruption on business and client relationships.
Those opting for one of the network’s preferred routes will be allowed to trade as an AR up until they receive the necessary authorisation from the FCA. Those leaving the network will have to exit by 31 July and it can take the regulator up to six months to authorise a firm.
peter.walker@ft.com
