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Tied agents are seeing the light

Increasing numbers of tied agents appear to be keen to reinvent themselves as IFAs and the networks are scrambling to snap up the converts.

But what does it take to make an IFA out of a tied salesman? And why are so many making the move?

Statistics certainly bear out the mass exodus from tied salesforces and related operations. At present, IFAs hold 55 per cent of the market but this is set to rise to 66 per cent in the next 18 months, according to consultants Lombard Street Research.

As Bankhall head of operations Tony Murrell puts it: “The number of IFAs is rising at a rate of knots.”

Last week saw Misys try to entice 350 ex-Colonial franchisees on board with a fast-track application process. The franchisees had been left jobless after Winterthur&#39s £322m takeover of Colonial Life the week before.

Sun Life Financial of Canada is also getting in on the act, this time to stop its own salesforce leaving in droves to become IFAs elsewhere. Money Marketing revealed last week that the life office is trying to hold on to theRIs by setting up its own network.

Support services company Bankhall recently helped 60 Lincoln staffset up their own IFA, Lighthouse.How did Bankhall do it?

Tied salesmen who aspire to be IFAs can take one of two routes, according to Bankhall&#39s Murrell. He says: “Tied agents have led a very sheltered existence and need some hand-holding support. They can join an established practice or,if they are fiercely independent, they can havetheir own business and join a support services company like Bankhall.”

Bankhall has a rolling programme of training for new recruits, the bulk of which seems to centre on getting tied agents used to a greater breadth of products. Those coming from a unit-linked background may not know with-profits products, for example. Tied agents also have to get acquainted with new technology.

Murrell says of the transition: “Itis a steep learning curve. It takes about a year.”

Network DBS says there are various knowledge areas it concentrates on. It says new IFAs have to get up to speed on client files, fact-finding, and reasons-why letters.

To help sort out these areas of concern it offers courses, a start-up pack for new recruits and access to a 10-strong research and technical team.

DBS has recently brought across some100 RIs from various salesforces, including Lincoln&#39s and Abbey Life&#39s. One RI said of the change: “Working with a network can help with the transition. You are working for yourself, not by yourself.”

Kestrel, one of five networks in the Misys stable, says setting up as an IFA may sound easy but it is not in prac-tice. Operations director Jonathan White says most difficulties come out of dealing with commission agencies and compliance.

He says: “The new IFA is suddenly responsible for the advice given -and accountable.”

The network appoints a development manager to help smooth over the cracks. It has gone from zero to 500 RIs in seven years.

What are the forces behind the surge in the number of IFAs?

Murrell puts it down to consumer pressures. He explains: “The public is becoming increasingly aware of the range of products available but tied advisers are offering a diminishing product range.”

DBS agrees. Spokeswoman Sue Lewis says: “People are voting with their feet and going to IFAs.”

There are also cost pressures at play according to Bankhall. IFAs are more economic for providers to use than tied advisers because there are no overheads for them to pay.

Consumers are not alone in voting with their feet. RIs themselves tend to see life offices such as Allied Dunbar as training grounds from which they will eventually move on.

It looks like budding IFAs need all the help they can get and the networks are only too willing to give it.


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