Sesame commercial director Martin Davis says the group expects most of its members to retain their IFA status after depolarisation, dismissing speculation that only firms with a minimum turnover would be allowed to opt out of its multi-tie.
In a Money Marketing interview last week, Davis said all members have the choice of remaining independent or signing up to its multi-tie offering, due to launch in January.
He expects most of its members, at least in the short term, to remain IFAs, particularly those with business models which fundamentally require a whole of market proposition.
Davis' comments quash speculation that Sesame is poised to allow only members with high turnovers to remain independent. The previously undisclosed decision to give them the choice could be integral to its efforts to stem the flow of members deserting the group, many of whom have defected to rival Bankhall.
In a trading statement last week, Sesame admitted that 7 per cent of its advisers had left in the year to May 31 – a fall of 500 to 6,100, a figure which includes IFA networks, support services members and mortgage brokers. But Davis stresses that the rate of loss is slowing, saying this indicates how Sesame has “started to get it right”.
Although he was unable to provide details, he said its efforts to retain RIs have centred on helping them find ways to become more productive.
Durlacher analyst David pannell has questioned Sesame's upbeat summary, pointing out that the number of advisers in its most profitable core regulated network fell from 5,600 in May last year to 4,550 last month.
Pannell says: “Sesame is replacing high-margin advisers with lower-margin unregulated ones. There has been no pick-up in turnover and profitability. It still has real issues.”
Davis said: “The rate of leaving has slowed dramatically. Our members will be able to choose whether to accept the multi-tie offering or remain IFAs. We think that the majority will stay independent.”
Sesame direct deal, p14