Network Direct has entered administration under the "ever-mounting" cost of professional indemnity insurance but its advisers have been thrown a lifeline by a rival.
Yesterday (November 23) new-entrant network Adviser Services Holdings Limited confirmed it had acquired the future trade of the business, providing a degree of certainty to its 100 advisers and their clients.
Adviser Services Holdings, which launched in May 2019, said the deal offered a "pragmatic solution that delivers continuity for everyone" and which would include support on income novation and re-authorisation for advisers.
A spokesperson for Harwood Wealth Management, which owns Network Direct, said the network was placed into administration yesterday "due to the impact of a combination of the continued weakness in investment markets, together with the ever-mounting cost of securing professional indemnity insurance."
They added: "We are pleased to have agreed this deal with ASHL, ensuring that the advisers and their clients can continue their successful relationships going forward."
Michael Couzens, chief executive of Adviser Services Holdings, said Harwood placing the network into administration was "not a reflection on the quality or professionalism of the advisers and staff".
He said: "We believe Network Direct is full of highly professional advisers who want to provide an excellent service to clients.
"We created ASHL because we felt there was a need for a more personal, hands-on network where advisers were simply more than cogs in a wheel.
"Because we are network-focused and with our history, we are a natural home for professional, independent advisers.
"We’re delighted that the ASHL network community is to be joined by Network Direct advisers and we can assure them and their clients that we will do everything we can to quickly facilitate their transition."
Earlier this year Adviser Services Holdings bought the Sense Network for £9.35m as part of the firm’s growth plans to build a 500-strong adviser network.
It was the network’s second acquisition, buying Lyncombe Consultants — an IFA network with 30 advisers — months before.
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