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
Hi Stephen. Great article about the potential death of networks. My colleague and I left a network last year and they refused to novate our clients amongst other horrendous problems. Since leaving them we have had to manually transfer our clients using individual letters of authority but we were resolute and determined and now directly regulated things couldn’t be better. My advice to anyone or any business on a network; get out now and go direct. It would be the best decision you’ll ever make.
Hi John,
Thanks for the kind words about the blog, glad you got there in the end with the client ownership. Hopefully more ifas will move now rather than risk their payments.
Stephen, why hasn’t my latest post in resonse to Imran appeared yet?
it would be good to read it john
Hi Stephen. Great article and an enjoyable read. What would you recommend to an adviser who would like to enter the IFA industry from a bank tied background. A client bank would be handy, however would you recommend going directly authorized through the two firms recommended in your article as opposed to a traditional network
Hi Imran,
Gosh, thats difficult to answer, direct is a big jump from being in a bank although not unheard of pending on your business experience. Dave, Rob and Jamie here do the recruitment, get in touch if you want some options talking through, they will know the good regionals in your area too.
Hi Imran, you can become a directly authorised IFA via a directly authorised firm like us rather than doing it all yourself, joining a network or even a Regional IFA. We have 4 ex-tied guys in Jigsaw. We take care of their T&C and Compliance needs leaving them to get on and do what they do best with clients. I would not recommend a network. Most if not all Of them own your clients and despite promises they can break them at anytime. Also the charges are likely to be higher via a network as they will charge for all sorts of things as well as their commission/fee split arrangement. Being direct as we have experienced has led to cheaper PI cover and no network charges. Dealing with the FSA directky has been a pleasure. Networks often sell themselves as “you’re safe with us”. That’s okay until things go wrong! Be warned. I’m sure not all networks are the same but like I said in my original posting being direct has been a breath of fresh air. Best wishes.
Thank you John. I will be in contact .
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