Personal Touch Financial Services is set to terminate the contracts of 16 of its appointed representatives later this year.
The network has today given the firms advance notice of its intentions, with the one month formal notice period beginning on 29 November. The 16 firms have been selected for termination based on their performance in several scenario tests including solvency margins, responsiveness to regulatory messages and other measurables, which did not include business volumes.
The decision to cut the contracts with these firms within the PTFS network is part of a five-year plan to scale down the size of its network, it says. At the end of 2011 there were 700 members in the network compared with 400 at present.
Further, in the past year and a half the network has lost a number of senior staff, including former chief executive Doug Crawford, sales and marketing director Dev Malle and commercial director Jonathan White.
Personal Touch today mailed all member firms who continue to meet strategic criteria for ongoing membership to detail the changes and to announce a freeze of support fees from the network.
The 16 firms will be provided with advice and support during the transition.
Chief executive Max Wright says: “Our business strategy is indeed a bold one and for an industry traditionally obsessed with number-counting and distribution volumes it may appear very radical, but even in the past 18 months we have already started to see the positive impact with improved productivity and turnover.
“I am particularly proud of our staff and members and the fact that we are one of only a small number of networks with a robust financial position who has ended the past year in profit.”