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Moving story

You have to take your hat off to the big networks. Somehow they seem to have convinced their members that moving from their network to a competitor is akin to Dr Indiana Jones&#39 journey to the Temple of Doom.

When you speak to network members, they seem to believe that the transfer process is fraught with difficulty, time-consuming and costly and no business can be written while the transfer is being arranged.

That is not true and this perception is changing.

Seventy-four per cent of our members have transferred to us from other networks. A year ago, we were probably seeing about one potential member a week. Now we see 10 or more.

We are seeing more groups of IFAs, particularly, it has to be said, from DBS. It certainly seems to have upset a number of its members.

In recent weeks, we have seen one group of five members, two groups of six members and one group of 10 members.

But what is involved in a transfer? Obviously, the first step is to talk to the network that you are considering. This, of course, may mean one or two meetings – an hour or two of your time.

If you decide to go ahead, the new network will arrange a compliance visit. This is akin to the regular compliance visits which the member will already be getting from their existing network. No one likes these visits but the FSA does require us to have appropriate procedures in place.

However, no reasonable IFA needs to be worried about them. No one expects an IFA to be either omnipotent or infallible.

As we all know, the FSA rules are huge, constantly changing and open to interpretation.

I do not believe that anyone has ever had a visit from the FSA and been given a completely clean bill of health.

There is always a number of errors, omissions or straightforward misinterpretations. The purpose of the visit is to spot these and suggest ways forward.

The visit will also probably include a short test on product knowledge. Again, none of us likes these tests but they are a feature of today&#39s compliance regime and no reasonable IFA should face any real difficulty with these tests and there is rarely any problem that cannot be overcome with a little further training.

In total, this visit will probably take about three or four hours of your time. The new network will take references in the usual way, obviously excluding the current network.

There will probably then be an induction meeting which is designed to give you a more detailed introduction to the new network such as meeting staff members. This is likely to take a further three to four hours.

The whole process takes around seven to 10 working hours, roughly a working day.

Once the IFA decides they want to join, they can then resign from the old network and their references are taken up and that is basically it. The new network will inform the FSA and inform providers of the change so that renewals are paid via the new network.

After the notice period (during which business can be written in the normal way), the IFA simply starts to do business via the new network.

But there are a couple of practical hurdles that have to be overcome.

At first sight, they seem daunting but, like so many things in an IFA&#39s life, a little thought can provide ready solutions.

The first is that many networks will stop paying commission as soon as a member resigns. What most people do not realise is that their new network can take on the responsibility for clawbacks, which is why the old network stops paying commission.

When the new network confirms it will take on that responsibility, the network will release the funds.

Let us say that an IFA has £5,000 of commission in the pipeline and writes a further £5,000 of commission during the notice period. Obviously, they will be owed £10,000.

They can take out a loan and repay it as soon as the commission is rel-eased. This usually happens around one to three months after the IFA starts doing business through the new network. The only cost is the interest. These days, that is tiny and while I do not know about other networks, we will reimburse that interest cost and can even help arrange the loan.

The second hurdle is that most networks will require copies of all your old files, which can be a nightmare.

The solution? Again, I do not know about other networks but we pay for someone to come in and do the photocopying for you.

The amalgamations and takeovers within networks have left many of us feeling like a small cog in a big machine, which is itself a small part of an even bigger machine.


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