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Blots on the landscape – Patrick Gayle

It is approaching crunch time for IFAs, who are just weeks away from deciding their future and whether they will retain their independent status. As the debate continues to rage, however, I am astounded at the number of market commentators who are completely missing the point.

It is up to each IFA firm to choose the model that best suits their clients and business while the role of the network is to support them in that choice. However, the judgements handed down by some commentators about which way advisers should jump before the full facts are known border on arrogance.

The fact is that the Government and the FSA have created a new regulatory landscape and in doing so have opened up a Pandora’s Box, with a myriad of different advice models available. This brings both threats and opportunities for all advice firms, the implications of which will no doubt emerge over time.

Our job at Sesame is simple. We need to continue to deliver the choice and support that advisers are looking for in the transition to the new depolarised environment. Sesame will be led by its members and will certainly not be imposing a one-size-fits-all solution in the way that some other service providers undoubtedly will. But the decision that advisers make needs to be an informed one. After all, a choice made without the full facts is a limited one or no choice at all.

It is not for networks to decide whether multi-tie, directly regulated or appointed representative models are best for their member firms.

Choice is key in this environment and consumers and advisers need to have as many options as possible, having the opportunity to appreciate the value of each channel in its own right.

If networks provide the infrastructure and guidance on how to translate regulatory, technology and service chan-ges into something far more practical for advisers, then they are succeeding in their responsibility to their members.

To restrict advisers’ right to choose is to deny them the potential opportunities that depolarisation brings. This is why the discussions and consultations taking place with our members are so important and why support in areas such as the transition to fee-based financial advice will be crucial because, for some IFAs, this will be a big issue and something that needs to be factored into their decision.

Further proof of this is the staggering response that Ses-ame has had from members looking for guidance on depolarisation at our forthcoming Sesame regional meetings.

So, what are our members telling us so far? As we look at the challenges ahead, I see little appetite among IFAs to give up their independent business status.

Member firms are passionate about the importance of offering advice that fits with their clients’ needs and aspirations. This advice may be given in a number of forms but at all times the clients’ interests are paramount.

What is crucial for the reputation of advisers is that this advice is not provided by way of a one-off sale typical of the bancassurance model but the focus is on building and maintaining lasting adviser/client relationships.

It is this separation of adv-ice from product selection that is one of the most significant features of depolarisation and places a greater emphasis on ongoing service.

Some firms do see the association with a strong branded service provider as important for winning and servicing clients but, understandably, few harbour thoughts of bec-oming wholly owned by their service company or network. Support services providers which can offer a range of opt-ions tailored to each adviser firm’s needs will emerge far stronger in the long term.

Because the market is constantly changing, advisers have to meet new regulatory requirements, keep abreast with product changes and meet the needs of ever more dem-anding clients. As a result, tech-nical knowledge needs to be updated regularly. The skill of an adviser to ask the right questions and suggest appropriate solutions, however, often has more to do with person-ality and experience than method. What is important is that a network provides solid support for its member firms in all eventualities.

In the next few years, independence will come to represent what it has always stood for – professional advisers working in an independent business environment.

Product selection will no longer be in conflict with the key issue, which is the delivery of quality advice. However, for this to happen, there must be an end to scaremongering and a focus instead on providing the choice and support that firms are looking for because it is advisers and their clients who will ultimately shape the future of financial advice in the UK.

Patrick Gale is chief executive of Sesame


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