Some of the most successful advice businesses in the UK operate within a national partnership structure.
There are many different business structures that can suit an advice company. When forming Continuum we looked at several structures before deciding that a national partnership model would be best for us.
For instance, we considered going down the network route, or a traditional employed model for our advisers in the form of a national advice business.
But we felt both had drawbacks that meant they were most likely not suitable for what we had in mind.
We wanted to develop a true modern financial planning experience, with a partnership of like-minded independent financial advisers who all share a common passion, approach and commitment to financial planning, and we felt that a national partnership model would allow us to do that.
Unlike a network, a partnership asks advice businesses to operate behind one brand and identity, enticing everyone to work as part of the same business and represent the traits desired by the company as a whole.
A network structure, where each business acts independently, we felt would most likely struggle to generate that ethos of collaboration and identity that we were looking for.
What makes partnerships different is that when clients deal with a member business, they are effectively dealing with the whole partnership and not just the adviser in front of them.
They enter what we like to describe as a three-way relationship between the adviser, themselves, and the wider business.
For us it was important that on the adviser side the clients can expect a business relationship which is ongoing, as opposed to a one-off business transaction with a sales person. This is because of the partnership's overarching focus on forging relationships rather than necessarily just wanting to build assets.
Advisers, on the other hand, can tap into the knowledge, experience and specialisms of others in the wider business without losing control of the individual relationship they have with each of their clients.
We felt a network structure would not have given us that cohesion.
From a legal and taxation perspective, advisers in a national partnership have to meet the compliance and regulatory requirements set by the parent company but are typically self-employed. Therefore, they are responsible for their own taxation.
The main difference between a national partnership and a network from a compliance perspective is that partners are registered individuals, whereas advice businesses within a network are appointed representatives.
In the case of an appointed representative as part of a network, the business and its advisers will still be required to demonstrate that they can competently conduct regulated business in accordance with the Financial Conduct Authority standards, but instead of holding the regulatory responsibility themselves, the network which is the directly authorised company, has that responsibility and is the principal company that is accountable to the FCA for the actions of all the ARs registered within it.