As a member of eight years standing of one of the Tenet Group’s AR networks, I read Simon Hudson’s piece in the March 29 edition of MM headlined, Gloom Service, with absolute incredulity.
Networks do include many excellent professional firms to my knowledge but this sort of piece helps foster the tired stereotype of network members as a lesser species of under-educated commission junkies.
I am involved in communicating with Tenet’s senior staff on a more regular basis than the average member and I have no knowledge of any mechanism via which the group collects information about customer attitudes to fees and commission.
If some people in Tenet have collected information about the attitude of their network members’ customers to fees and commission, they have never fed it back to us.
My firm joined Tenet in 1999 with a fee-based model already in place and we felt they had difficulty understanding it although, to be fair, one or two senior people have been very positive about our approach.
Since depolarisation, the evidence I have seen is that only a very small minority of the network’s members are seriously delivering a fee-based proposition.
However, I felt until now that this was down to the member firms simply being a fair sample of the industry. I doubt if the picture is much different elsewhere.
I had no idea that the chief executive was so blatantly hostile to the idea of fees and serious qualifications. He must really dislike members like me that not only charge fees every day of the week but have more than one chartered professional qualification. I should clearly be totally ashamed of being so nerdy.
What really disappoints me is that old chestnut that fees are seen as a rip-off. Perhaps Simon should ask a few customers buying £100,000-worth of investments on the advice of one of his members this question: “Would you prefer to pay via commission and have £7,500 less in your investment fund from the start as opposed to paying a time-based fee for four hours work totalling £560.”
I think all the clients would then understand where the rip-off is.
The bottom line is that the network model lives on its weekly top slice of its member commissions and is really scared of its members billing clients direct. However, we have proved that it is possible for networks and fee-charging members to have mutually beneficial commercial arrangements.
Some of us are looking forward while still helping widows, orphans and the retired. Simon would be better off with a bit-part in Life On Mars.
Ethos Financial Management