The Death of IFA Networks

Do you remember the direct sales force organisations?

They taught a lot of essential skills about being a financial adviser, which the regulator doesn’t seem to appreciate, recognise or even fully understand today.

These forgotten arts include prospecting, referral generation and rapport building, amongst plenty of others. Teaching younger people to pass exams is the easy part, teaching them to handle the mysterious internal stomach churning of sales call reluctance and how to gain trust? Well that’s a whole different ball game.

What’s all this direct sales force nostalgia got to do with the current network situation?

Well, my point is that its often not the firm that isn’t viable it’s the business model. The world changes, organisations don’t and some firms dissolve, this is the law of competition, this is why WH Smith isn’t Amazon, why the Yellow pages isn’t Google and why some Networks will be obsolete.

When a model is not viable, it’s highly like not to be viable across the whole sector.

The Pru did not retain its direct sales channel. Back then it was logical (but not obvious) that neither would the Pearl or the Brittanic or the others.

Memories flood back of a candidate calling in from the hotel room of his Life Office induction-training course. We had placed him there that week and he had seen the news of the demise of his career and his new sales force on national TV. PLC greed at the expense of individuals.

The network model is dead. If one network fails others will be sure to follow. When PI costs spike for one, they will spike for most. A few players will remain strong, but why take a chance with your business and you livelihood?

Check your contract, check who owns your trail, if your not completely clear on it then you should consider your options and it may be a wise move to extricate yourself now.

What are the options? Here are a few pointers in the right direction for you.

Go Direct

Simplybiz and Threesixty have some great support mechanisms for achieving this.

Join a Safe Network

Paradigm offers complete transparency because the commissions come into your bank account first. You then pay them for services from your account. Some others may well offer this.

 Join a Growing Regional

Larger regional players would love you as part of the team, plenty are in growth mode bolting on acquisitions. Your clients will need ring fencing and clear expectations agreed on both sides before joining forces but it could be fun.

Now is the time to be cautious about your revenue and your livelihood, get in touch if you need further pointers.

Wishing you continued success,

Stephen Hagues