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Deal won’t impinge on independence, says Gale

Sesame chief executive Patrick Gale is reassuring members that the Friends Provident deal will not compromise their independence.

He says product provider ownership of distribution is a consequence of adviser businesses’ capital requirements and is becoming increasingly common.

Gale says: “Insurance companies are taking more stakes in IFA businesses and I think it is a natural consequence of the large amount of capital required to run distribution businesses, recognising that is where the value lies in the chain.

“Being owned by a provider will not have an impact on our independence.”

Some members have expressed concerns about being owned by an insurer.

Iredale Financial Advisers partner Frank Iredale says: “FP seems ethical enough but I have concerns about independence as I have always taken pride in telling clients I have no links to a bank or insurance company.”

Watermark Financial Services partner Mark Woods says: “This has been a long time coming. Sesame has been a sinking ship for ages now. I have left the network and just buy services but only because they make it almost impossible to go elsewhere. Sesame does not operate at competitive costs for services and I would hope Friends Provident will address that by making some cost-cuttings on management salaries.”

Shropshire-based IFS principal Rosemary Heaversedge says: “Overall, we would prefer not to be owned by a provider but the proof of the pudding will be in the eating.”

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