Network ship is on an even keel at last

19 April 2010

A quarterly round-up of appointed representative networks

PAUL DAY, DIRECTOR, WHICH NETWORK

It’s refreshing to see that Q1 2010 has been stable in network land, relatively speaking. Although questions have been raised about some networks, nothing of substance has transpired and no evidence has surfaced in the public domain to indicate there will be further casualties.

And at last we have seen an increase in appointed representative numbers in the sector, with a net rise of 285 firms.

Unlike certain other commentators I do not think advisers are deserting the industry in droves - I believe that many former sole trader AR firms have opted for life as registered individuals instead.

But we are seeing an increasing number of enquiries from advisers looking to break loose of someone else’s shackles as RIs - and indeed, some from employed positions to start their own practices. This has to be good news.

Looking at the table below the most notable movement can be seen with Financial Ltd. Most of this increase is a result of AR firms being transferred from Investments Ltd, part of the same group.

Another network gaining numbers is Julian Harris, which has taken on a number of former Mortgage Times ARs. Meanwhile, Mint Financial Services and Homeloan Partnership are continuing to steadily add to their numbers.

The networks losing ARs seem to be clustered towards the upper end of the table, with 68% of firms leaving networks being attributed to the top five companies.

Many networks have told us that the Financial Services Authority is becoming more stringent in the application process and is in many instances requesting more information than was previously the case. This means applications are taking longer.

And delays may be compounded in future following the regulator’s proposal to create a controlled function for anyone advising on mortgages - CF31.

Add this to the proposed CF10 category for individuals with specific compliance oversight functions within firms and it looks like the FSA’s resources are going to be stretched - unless, of course, it adopts the solution that became prevalent in the past decade and outsources some of its workload to a cheaper country.