Should I join an IFA network? It’s a question almost every financial adviser will ask during their career.
Advice firms come in all shapes and sizes, with their needs changing as they progress through their business lifecycle. Such factors are important when deciding whether to join a financial adviser network, and ultimately many choose the appointed representative (AR) route because there is a gap in their operations that a network can fill – whether it be expertise, support, or security.
Networks are a one-stop shop, providing advisers with everything they need to succeed in an ever-changing regulated market, including regulatory support, technology, CPD and growth services. Furthermore, joining a network doesn’t have to mean giving up your independence. Not all IFA networks are ‘tied’, with independent networks such as Tenet allowing IFAs to unlock all the benefits without sacrificing their freedom nor the suitability of advice for their clients.
Here are some of the top reasons Tenet members have given for joining our network.
A safety blanket
First and foremost, financial adviser networks provide members with a hard, protective shell between them and the regulator. By joining a network, advisers become an AR, operating as part of the network which serves as the ‘principal’.
With so many different things to consider, from changing regulations to adapting processes and controls, joining an IFA network offers advisers the assurance they’re acting in line with the latest standards and best practices. With networks shouldering the lion’s share of responsibility for members’ regulated activities, they also fill any expertise and support gaps that member firms may have. In addition, some networks, such as Tenet, provide firms with an exit strategy, either by offering PBOs, or protecting back books from risk, thereby safeguarding the value of a member’s business.
Without the safety blanket of a network, firms would have sole responsibility in an ever-tightening regulatory environment and may even need a dedicated compliance function.
“Tenet is my layer of protection between myself and the FCA. They give me peace of mind that I’m always on the right side of regulations and allow me to focus on the parts of the job I enjoy.”
- Lottie Kent, True Financial Design, Tenet Network Services member
Time & money
From regulatory fees and compliance costs to PI insurance and capital adequacy, the costs of going it alone can quickly mount up. And even if it was to work out cheaper, there’s the not-so-small time investment to be considered which can make all the difference.
In comparison, IFA networks can tap economies of scale and provide much of what’s needed in one simple package. If you choose the right network, significant undertakings such as investment in training and recruitment support can also be part of the overall service, too - both of which can be time consuming and costly for smaller IFAs.
Another area that network members can benefit from is Professional Indemnity Insurance (PII). Rising rates continue to be an issue for PII, with networks often offering some of the most competitive PII rates. Further savings can be made, with some networks, such as Tenet, having their own captive insurance company, thereby offering much better rates than networks that do not offer this.
Technology & resources
Being part of an IFA network also frees advisers from the need to build resources in-house, providing access to industry-leading technology systems that make workstreams far more efficient.
Technology enables advisers to better communicate within the network and manage engagements with their clients, particularly with new remote ways of working. Meanwhile, other resource perks include marketing growth services, business advice and CPD.
Tech can also help with compliance reporting. It’s no longer enough to just do the right thing - firms must now be able to prove they are producing good customer outcomes, with the FCA requiring advisers to have appropriate and demonstrable systems in place. Technology on tap can significantly ease this burden.
“Tenet provide the utmost professionalism and efficiency. They instil confidence to my business in a financial world which is fraught with lenders, regulation and advising consistency. We feel part of one team… and the support offered is next to none.”
- Graham Wilson, Options Mortgage Centre, member of Tenet Network Services
Ready-made research
Financial advisers also benefit from networks’ research capabilities. With hundreds of options out there in the market, keeping abreast of all the latest products and their suitability for clients is no easy feat. But with a network, they are never alone.
Whether as an independent financial or mortgage adviser, or a tied one, network advisers have access to an extensive panel of products and benefit from the network undertaking all the provider due diligence. Expertise is just a phone call away, saving advisers considerable time and giving them assurance about making the right decisions for clients – even when those clients have unusual or vulnerable circumstances.
An eye on the future
Finally, there comes a time in everyone’s life to step back and enjoy a well-earned retirement. Being part of an IFA network not only relieves many of the burdens of running a business in the twilight years of an adviser’s career, but also provides a ready-made selling option when the time feels right to exit.
Many of the larger-sized financial adviser networks (including Tenet) operate a practice buy-out programme for their members. Being part of a network means the principal will already have a strong working knowledge of the business, removing the strain of sale due diligence and allowing advisers to retire safe in the knowledge their clients will continue being looked after by a trusted partner.
For more information on how network membership can help financial advisers grow and succeed with confidence, security and peace of mind, get in touch now at: joinus@tenet.co.uk