With so much change, a new world full of regulation and the effects of the RDR looming, the nice to have offering with a full range of services is suddenly being challenged. Many brokers are yet again examining their business models and re-assessing their areas of specialism.
For many who have either already offered or expanded their model to include pensions and investments, there is a slight mood change, with some brokers now looking at splitting the business. By examining how much of their time is spent on each aspect, especially those firms that have a specialist solely to deal with the investments and pensions side, brokers can analyse the business needs to see whether the structure can be improved to maximise business levels.
From what we have seen, it seems that there is a preference to remain directly authorised on the investment side and continue in that model but there is growing tendency for brokers to be appointed representative on the mortgage and protection side, perhaps to ensure they can access the specialist knowledge on lender criteria and quality controls.
Being an AR of a network is no longer an unknown entity or even a threat – it is an established model that everyone understands now and it does not stop anyone running their business as they see fit. The network merely becomes a business partner adding the value in the regulatory compliance aspect as well as looking at ways to help grow the business simply because a successful business benefits both parties.
Now I know that IFA networks are there with all of these services and that is absolutely fine for those firms that do an equal amount of both but for those that do a small amount of one and a large amount of, say, mortgages, those firms are now looking at what the business needs.
Yet again, brokers are having to defy the norm, challenge their thinking and reinvent their business models but in fairness that is exactly what many already do to stay competitive and successful in this increasingly tricky industry. This economic climate calls for an entrepreneurial spirit and most firms that have survived are already doing it.
So now is the time to check the footings are in ready to build the house.