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Raw deal?

Sesame lost £1m in the first half of 2009, plunging from a profit of £2m in 2008, but insists it remains in a strong position to independently fund the takeover of Bankhall.

But with Resolution on the verge of acquiring Friends Provident, it is questionable whether a strong focus on distribution will fit with Clive Cowdery’s future vision for the company.

In June 2009 Sesame announced it was in discussions with Skandia to acquire Bankhall and Premier Mortgage Services.

Sesame sales and marketing director Steve Young says the recent loss does not reflect on Sesame’s ability to acquire the two firms.

He says: “We will fund the Bankhall deal entirely on our own reserves.”

The takeover, which is currently going through due diligence, is expected to result in a 3,000-strong appointed representative network and a service business supporting over 1,500 firms.

Young says he cannot disclose the company’s current financial position, but insists that Sesame is on track to make a profit in 2009.

But SimplyBiz chairman Ken Davy says: “It is hard to see how Sesame and potentially Bankhall will be relevant to what Cowdery is looking to achieve in the long term.”

Do you think Resolution will look to nurture a large distribution arm, or will it focus more on the life and pensions market?

Is the deal likely to have an impact on IFAs in terms of a potential reduction in service standards for advisers?

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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Roland Millward 12th August 2009 at 4:18 pm

    Raw Deal
    I hope that Sesame don’t follow the same pattern as Network Data!

    I wonder if Sesame balloted its members on this deal. If they did, it would be a first.

  3. Neil F Liversidge 13th August 2009 at 10:09 am

    The bigger they are, the harder they fall.
    I’m starting to wonder if large firms and networks can ever be viable after all the failures and losses of recent years. How ironic iti s then that the FSA is trying to exterminate small firms who present the least risk and whose owner/managers have the greatest vested interest in ensuring their successful continuation. I was at a Sesame seminar a few years back at Leeds Armouries (when it was still DBS) where Steve Pearson absolutely assured the audience that the directly regulated small firm would soon be a thing iof the past because the FSA was determined to get rid of them. Whilst that was of course a network sales pitch, I think the reference to the FSA’s intentions was pretty accurate. It just shows though how daft the FSA is when it prefers loss-making large entities with slack controls over the advice they give to profitable small entities where, in my experience, the owner/manager watches the advice quality like a hawk. No manager looks after a business as well as an owner. Will the FSA ever wake up to that fact of life?

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