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.”