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Multi-ties are an opportunity, not a threat

Sadly, we have seen a significant reduction in the number of advisers over the past decade which has undoubtedly contri-buted to the increasing gaps that have emerged in savings, retirement plan-ning and more importantly, protection.

With decreasing consumer access to face-to- face advice, there appears to be much debate regarding the development of additional distribution models, in particular multi-tie, which some see as direct competition to whole-of- market advice.

With an ageing adviser population there is clearly a need to develop distribution models that are app-ropriate to the varying needs of the UK consumer. Indeed, many IFAs admit that they are unable to economically service the re-quirements of a large percentage of clients.

There is also a general acceptance that the IFA-model better suits the needs of consumers requiring more sophisticated and comprehensive advice.

This may be where multi-ties can help fill the gap. We should be looking at multi-ties as an opportunity to develop face-to-face distribution and to see it as complimentary, rather than as a threat to the traditional IFA model.

Multi-tie will never re-place the more complete IFA service. However, we have to accept there is a gap in the advice available to the consumer as a whole that can be filled with a driven and focused distribution force that can provide value to UK consumers.

There is no reason why a well-structured multi-tie could not provide quality and value to consumers. If you tie with the right product providers, some of the products available to the consumer could represent “best of breed” and, in some cases, may be exclusive to the multi-tie adviser, thus offering added benefit to consumers.

With the emphasis on choice and the opportunity to grow distribution, the market should gain from increasing access to good value, face-to-face advice. We are naturally seeing a growth in direct and internet-based offerings but we are a long way from seeing the shifts previously expected.

The robust IFA-model will always have a place in financial services and will, undoubtedly, be the long-term survivor. However, multi-tie is an opportunity both to increase distribution and to attract new blood into the adviser population.

Multi-tie could be seen to provide a nursery for advisers who wish to pro-gress to IFA status and it is possible we may even see larger IFA practices choosing a dual status, where a number of advisers are multi-tied to serve the needs of their entire client bank.

It is this idea of the traditional and multi-tie model co-existing in harmony that essentially summarises how the market could evolve to the benefit of all.

There are currently too many people needing advice to be serviced by our current models and the opportunity to grow face-to-face distribution, if properly executed, can only be a positive development for both the UK consumer and industry in general.

Keith Richards is group sales and marketing director at Tenet Group


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