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Sesame confirms advisers have six months to go restricted

Sesame Bankhall Group has today confirmed members will have six months to move to its restricted offering, become directly authorised under its Bankhall brand or leave the network altogether.

Speaking at the firm’s annual conference, managing director Stephen Gazard told delegates: “We have concluded that supporting non-mainstream investment areas, such as agricultural property investments, traded life policies and experienced investor schemes, is unsustainable for us. It carries too much risk and we firmly believe others will conclude the same in time.”

Sesame says it has analysed past business and found that only 32 cases out of 225,000 over the past 12 months would not have been possible under the new restricted propositions.

Sesame says it will not be “looking to drive you down a restricted panel of providers” but will restrict advice to mainstream investment products.

Gazard adds: “We need to be realistic. Higher risk products increase the likelihood of recompense, so why would we expose ourselves, you and the consumer to these areas?

“If offering non-mainstream investments is truly fundamental to your business then we sadly acknowledge that Sesame will no longer be an appropriate home for you.”

The firm says advisers that wish to move will have six months from today to decide what they want to do and that provisions have been made to transfer those that wish to become directly authorised into Bankhall.

The new restricted offering will be known as Sesame’s ‘Universal’ proposition and will sit alongside Bankhall’s DA advisers and its current restricted proposition. It means there will no longer be any Sesame-authorised advisers offering independent advice.

Sesame says its mortgage and protection advisers will not be affected.

In November Money Marketing revealed Sesame was to switch to a restricted proposition.

Earlier this month chief executive George Higginson left SBG as part of a reshuffle.

SBG has been up for sale by parent Friends Life for close to a year. 

Earlier this week Sesame pulled a number of roadshows following concerns it would fall foul of FCA rules on inducements. 


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There are 18 comments at the moment, we would love to hear your opinion too.

  1. The headline should read

    “Sesame confirms advisers have six months to become directly authorised!”

  2. I hate to rain on the parade but in all likelihood most advisers will end up restricted in some form or other. Just look at Wraps – what adviser is going to offer a dozen when one will do an excellent job?

  3. Only 0.01% of cases requiring an independent proposition suggests that the need to move to a restricted model isn’t really there?

  4. Very sensible move by Sesame – Both from a commercial and compliance point of view. I wonder how many directly authorised Individuals would qualify as “Independent” if FCA requirements were taken literally. At the moment we have the farcical situation were the FCA have a definition with which almost no one can comply.

  5. Here is the FCA guidance on what constitutes independence

    What do you need to do if you want to call yourself independent?

    You need to:
    •consider a broader range of products than before (retail investment products)
    •provide unbiased and unrestricted advice based on a comprehensive and fair analysis of the relevant market
    •inform your clients before you provide advice that you provide independent advice

    I am not sure why anyone thinks that the above is particularly difficult

  6. The parameters for independence may not be particularly difficult to understand. The problem is the amount of work and costs involved in complying with them, particularly when it comes to keeping up with and comparing all the platforms for every new investment and, so the networks tell us, even for top-ups.

    Anecdotally, many IFA’s have a panel of just three or four platforms and claim therefore to be independent but I don’t see how they can be ~ you either compare them all for every case or you restrict to just one. How can anything in between constitute independence? I agree with Xeno ~ most of this can be avoided simply by choosing one platform that does almost everything that the great majority of clients need.

    And we still don’t know just what Sesame’s parameters for restricted will be. If it’s to be an opt-out from advising on ETF’s, VCT’s, EIS’s etc, a tie to just one or two selected platforms but WoM for everything else, then what’s the problem? As just about any SJP partner will attest, the public aren’t bothered at all about dealing with someone who’s elected to opt out from having to compare and analyse the possible suitability or otherwise of every potentially suitable retail product on the market.

  7. @Julian “so the networks tell us” here lies the nub of the problem

    More importantly surely is what evidence/frequency the FCA expects the IFA to demonstrate.

  8. The cost of independence is negligible. Fact. Once you adapt to a slightly different form of working then everything drops into place. But the issue is more fundamental. Do you really want to be part of a bust network model? Sesame are up for sale – to Openwork perhaps? Is that what IFAs want or need? Or is it a case of elderly IFAs stuck in the past unwilling to accept less alone address change?
    IFAs should take control of their business, go DA through SimplyBiz or ThreeSixty at a fraction of the cost of being a network member. Regain your sanity!
    I have said it elsewhere too. How can you work with a provider panel when you have serious reservations about one of those companies?

  9. Thank you Nick & Martin.

    I have been trying to explain that being Independent isn’t nearly as onerous as many seem to think. Unfortunately the vested interests (mainly the Networks) have gilded the lily to such an extent that their gullible members think the hurdle is as high at Mt Everest. These people are not used to interfacing with the Regulator directly so swallow this guff whole. Perhaps if they actually spoke to the FCC they might actually get a different view.

    I also wonder if a previous post is really so far off the mark:

    Basically I have heard that Sesame is strong arming some who wish to go DA and leave the network that life would be made difficult for them if they didn’t use Bankhall Compliance Service – it may be just hearsay and rumour, but I do wonder.

  10. @ No Nick – The nub of the problem concerns the benefit, if any, for the adviser and client of continuing to use the word “Independent. I seen that many/most IFAs are thinking like rabbits caught in the headlights.
    A Rose by any other name. The public do not care. It is possible to provide better service as a Restricted Adviser, to operate with reduced costs and to have less compliance hassle than to continue to rabbit on about being Independent. For Individuals there will always be a choice but for larger organizations – Networks and larger firms – Restricted will probably be the way to go.

  11. @ Bones

    That’s fine if you just want to attract clients who contribute £100/month and if you have no interest in providing holistic advice and planning.

    But for the somewhat better off referred from solicitors, accountants, stockbrokers etc., then you’d be amazed at how much this public cares.

  12. @ Harry – Can’t argue with you about the professional referrals market segment but this is really a very small market – perhaps 5% true Independent/ professional/ fee paying. Ultimately real IFAs – charging fee for advice rather than taking a fund percentage – commission by another name – will concentrate more and more on the more complex and demanding end of the market. This market is not, however, the market for the majority who still call themselves Independent and I would question how many members of Sesame were ever Really Independent anyway.

  13. The tag ‘independent’ or ‘restricted’ still harks back to products not advice. Anyone kidding themselves that they are somehow giving better ADVICE because they are using the ‘Independent’ tag needs a wake up call. Mark my words, more and more advisers will be forced to review their processes and to admit to being restricted in some way, albeit it maiy only be in a small part (my example Wraps above). At the end of the day t’s ADVICE we should be selling not the products – and you don’t need to be Independent to give 5 star ADVICE and service.

  14. This forum should be about the adviser community, instead we get the likes of Sam Caunt who waste this space to recruit for their simply bizes and 360 with the go DA go DA… in my opinion its all about how you market yourself and yes its all about good advice and not products, so I don’t see what’s the fuss is all about, I’m not a Sesame member but can see why they are doing it and think it’s a very sensible move by their network. Sure my network will follow soon…very soon just read Russell Warwick writing about nervousness” in the professional indemnity insurance (PII) market, this may educate some.

  15. I agree with Martin, Sam and Harry on this – this ‘holy grail’ of achieving independence is not the mountain many make it out to be.

    We work closely with ‘professional connections’ and whilst (for example) VCTs, EISs etc aren’t mainstream, we need to have then available to us and we discuss them if and when they may be appropriate.

    I have seen it said that there are those who are still clinging onto the IFA brand whilst not being truly ‘IFA’ – but I also suspect there are others who were already delivering the ‘post RDR’ IFA level of coverage and simply could carry on regardless as the new rules didn’t affect their existing holistic approach.

  16. @ Sam
    You don’t even need these to go DA. (Simply Biz or Three Sixty). You can actually hack it without them if you are prepared to make the effort. I had Simply Biz call recently to recruit. One simple question knocked it on the head. If you are controlling compliance and I transgress and get fined by the Regulator – do you return my fees?

    @ Bones
    Your last sentence is spot on and rather concludes the discussion.
    Of course it makes sense for Networks to go restricted. They need to control their members at the least cost. They don’t view it from a client centric perspective – they never did. It’s all about their bottom line (remember the Network itself doesn’t deal with clients – the members do) and ensuring they don’t get fined. Why do you think there have been no takers when Friends have had them on the market for so long?

  17. PS

    Funny isn’t it that I am well aware of advisers still within networks who have not attained Level 4 nor are attempting to do so are still interfacing with clients using the term Independent and letters IFA – with the full knowledge of the Network. So much for regulatory oversight.

    What on earth they are doing without the requisite qualification is a bit beyond me. I presume the theory is that the confine themselves to life cover only. I wonder how they communicate this to clients who of course deal with the same person they have done since 2012 when these distinctions were not in force.

    it rather makes a mockery of the rest of us who made the effort.

  18. @Harry Katz is right. Independence is nowhere near as difficult to achieve as some of the big networks suggest. As a smaller network, we have taken notice of what our members wanted and worked with them to ensure that they can meet the independence requirements.

    All that is needed is a structured approach to CPD (covering all RIPs), a properly constructed set of qualification questions to identify clients for whom more esoteric products might be suitable and a comprehensive range of independent research on all RIPs (which can be bought from third parties).

    Of course there is a little more work. But we think that its worth it to deliver the best possible outcome for clients.

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