Openwork chief executive Martin Davis says he expects there to be only two or three networks remaining by 2013.
Davis says: “The belief is that the middle market will suffer. We currently have around 10 major networks and there is lots of pressure, particularly in the area of mortgages. Only well-run, well-capitalised businesses will survive the coming years. Further closures and more consolidation are likely.”
Tenet distribution and development director Keith Richards says: “We are likely to see more consolidation. The regulator is introducing capital adequacy requirements on a sector that was already challenged. We also believe there will be two or three big networks at the end of the day but we are likely to see a few new niche entrants in the market based on the new model.”
Davis says linking up with a wrap platform is one of his major targets for 2010, which would help with the move to adviser charging under the retail distribution review.
On acquisitions, Davis adds: “We have been approached by a number of firms that have cashflow problems or need more advisers but nothing has been appropriate yet.”