View more on these topics

Network edge

The comments made by our colleagues at Sesame and Bankhall regarding their predictions that smaller networks will not survive nor have the scale to multi-tie were very intriguing to say the least and demonstrate the depth of self-delusion and complacency inherent in certain parts of our industry.

A parallel example of such business myopia can be found in the airline industry where traditional airlines thought the “smaller players” such as Ryan Air and Easyjet models would not work. We all know it was the bigger players which almost went to the wall and even now continue to suffer.

Mint agrees with the anecdotal evidence that poor business models, irrespective of the size of the organisation that worked in the 1980s and 1990s are no longer viable in the current climate as the landscape in which we work has changed and will continue to change. Such models will not work in the future either simply by wallpapering the cracks that exist within such models or through amalgamation or the juxtaposition of inefficient models.

Networks with poor and unprofitable business models that haemorrhage cash, irrespective of size or scale, will continue to struggle, and are unlikely to survive. Conversely, the forward-thinking network with greater efficiency and structure built around the use of technology and profitable business models will most certainly thrive.

Change is here to stay, and the more adaptable and market sensitive the model the easier it will be not only to evolve with the environment but also to play a leading role in shaping the future of our great industry. More irony on size is that, over the next two years, Mint will itself become a bigger player, growing organically while looking to acquire the smaller IFA with a less than economical business model, and a desire to use end to end technology to enhance business value.

What we are trying to say is that a smaller network must have the desire to survive, have a robust model and be willing to have pinpoint sensory acuity. A smaller network will be able to adapt its model relatively easily if it has the desire to take intelligent action at the appropriate times.

At Mint, we have had the unique opportunity to observe the past mistakes of larger networks and have devised a model based on profitability through effective use of technology and not on ego or wastefulness of resources.

In Mint&#39s first full year of trading (December 2003), it made a healthy profit. Our offer to our members is based on sustainable ecommerce and support of that platform.

I read with astonishment in last week&#39s edition that Bankhall actually finds it a marketing advantage to announce spending “significantly in excess” of £9.8m on technology.

The reality is that technology solutions can be relatively inexpensive if sufficient thought goes into what you want to achieve and a planned methodical approach is adopted. We have a technology team that work around the clock on support, programming and development work.

From its own investigations, Mint disagrees that the true IFA appointed representative, given the choice, will want a multi-tie proposition at all, and so Mint&#39s focus (and that of its ARs) will remain on true independence.

Most IFAs&#39 view is that multi-ties should be left to the banks and currently tied organisations. The whole objective of multi-tie is to effect the better distribution of products and services to the consumer from the sources that currently are unable to deliver more than one provider&#39s products.

Mint&#39s view is that some larger networks see multi-tie as a way to exploit the depolarisation rules in order to pitch one provider against another for additional commission while undermining the benefits of independent financial advice.

All consumer groups should be afforded the benefit of independent advice, and migration from IFA smacks of discrimination.

Both Sesame and Bankhall appear to have neglected the fact that the member IFA firms are the most important factor in their business equation – Mint is able to deliver a prompt and efficient service through the effective use of technology, which can and will continue irrespective of the growth in member numbers.

We have sound professional indemnity cover in place and have had favourable reviews both from an external risk assessment company and the FSA.

One of the aspects of size that is assumed is that the level of commission that a smaller network can command with product providers is lower than with a bigger organisation. This myth is nonsense if you have the right business model in place, valuable connections at higher levels and the belief from the providers that accelerated, ethical and sustainable growth is attainable.

Paul Gains is chief executive at Mint Financial Services


FSA reviews its projection role

The FSA is undertaking a fundamental review of projection rates and has published a discussion paper looking for views from the industry. The paper asks whether it is appropriate for the FSA to withdraw completely from the regulation of future returns or whether the regulator should prohibit companies from providing illustrations of potential returns in […]

SG Asset Management – SG International Bond Fund

Type: Oeic Aim: Income by investing globally in fixed-interest securities Minimum investment: Lump sum £1,000, monthly £50 Investment split: 100% in global fixed -interest securities Isa link: Yes Pep transfers: Yes Charges: Initial 3.5%, annual 1.25% Commission: Initial 3%, renewal 0.5% Tel: 0808 1007426

ScotProv and Skandia top the critical league

Scottish Provident and Skandia Life have topped a new Lifesearch critical-illness report card launched exclusively in Money Marketing this week. The two firms beat nine other major providers, scoring 92 points out of a possible 120, derived from rating the prov-iders&#39 types of rates offered (guaranteed or reviewable), conditions covered, service, communication, flexibility and quality […]

Fees set to fall by 1%

FSA fees are to fall by around 1 per cent this year. The regulator says its annual funding requirement in 2004/05 is projected to be £213.3m, marginally lower than the £214m for 2003/04. It is entirely funded by fees from the firms it regulates and it expects that fees will reduce by 1 per cent. […]

 Article 50 Q&A: The negotiations to watch for 

Holly Cassell, Assistant Manager of the top-performing Neptune UK Mid Cap Fund, discusses the potential near-term impact of Article 50 and the Brexit negotiations that she believes investors should pay most attention to. Read article here Important information  Investment risks  Neptune funds may have a high historic volatility rating and past performance is not a […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm