Bankhall says multi-tying could more than double advisers' operating margins.
Speaking at Money Marketing Live on Tuesday in a debate on depolarisation, Bankhall group sales director Shaun Godfrey said: “If you look at the operating margin of most IFAs which is around 10 per cent, with the cost savings that multi-tie will bring through technology and PI they should be able to get the margin up to 22-23 per cent. This is not, however, a reason to go into multi-tie.”
He added the change involved in moving to multi-tie and making a big profit would take around five years.
True Financial Planning managing director John Baxter said the vast majority of IFAs will not have the scale to command multi-tie deals. Tenet director Geoffrey Clarkson said running a profitable multi-tie depends on the type of business rather than its size, with transactional businesses lending themselves more to the multi-tie model.
Sesame commercial director Martin Davis said businesses with high percentages of transactional-type business have the opportunity to reduce their costs massively and increase productivity and profitability through multi-tying.