FR: Recent figures appear to suggest that more firms are opting for directly authorised status rather than become ARs of networks. What are the benefits of the network model?
There are many but most firms we act as Principal for will probably tell you that they want certainty when it comes to compliance, they want access to products and services which they might not be able to access purely as a DA firm, and they also want cutting-edge technology which can help and support their businesses in today’s marketplace.
Clearly not all firms will want to go down the AR route however we have found that those that do are appreciative of the proposition we can offer them. We keep our fee structure simple and we work with them closely so that they know we are not just reviewing their business and taking a slice off the top for it. Our aim is to help firms explore all the opportunities that are available to them not just their core mortgage work but also other product areas such as protection and general insurance.
FR: Is the market becoming almost impossible for one/two-man band adviser firms to thrive within?
Not at all. I’m a firm believer that the one/two-man band firms are still viable and actually remain the lifeblood of the financial services market – whether they be mortgage advisers, financial advisers, etc. There however are some challenges for smaller firms to overcome in terms of regulatory compliance, regulatory cost and the ability to compete with much larger firms with larger marketing and advertising budgets.
This is where they can draw upon the benefits of using a network such as us who effectively take some of those business pressures off the firms allowing them to do what they are there to do – advise clients. It’s certainly true that bigger operators/distributors do get access to various products and services which a smaller firm ordinarily might not be able to secure for their clients. By joining a network, smaller firms effectively boost their power in the marketplace and, with a quality Principal acting on their behalf, they can assume the bargaining/buying power of a much bigger operator. This means they never miss out on the best.
FR: Stonebridge have been strong advocates of cross-selling particularly GI and protection – are these sectors likely to improve again now that securing a mortgage has become more difficult?
It’s difficult to tell. In terms of our advisers and firms we have always preached the message that they need to take care of their client’s mortgage, protection and GI needs all the time. We do not advocate shifting priorities just because one marketplace appears to be more lucrative than another, at any given time. We want our advisers to follow the same process which means actively ensuring that they’re aware of their clients’ needs and have the tools at their fingertips in order to satisfy those needs.
We hear much about mortgage advisers moving in and out of protection/general insurance whenever it suits them, however I hope most advisers with any common business sense recognise the advantages of continuous activity in those areas. After all, a mortgage is a transactional sale which provides a one-off procuration fee however with protection and GI advisers can be earning regular trail, which will act as the foundations of the firm. It certainly does not make sense to neglect one product sector over another; in fact, the idea should be to cover off as many client needs in one place as possible. And if the adviser cannot advise then they should be introducing to someone who can.
FR: What do you see as the ‘must haves’ for advisers if they want to be successful in today’s marketplace?
I mentioned it above but top-quality technology is absolutely essential. We are not just talking about sourcing systems and the like but a full 360-degree proposition such as ours – Revolution - which offers sourcing, client management, marketing tools, client interactivity, case tracking, platforms for introducers, etc.
It’s all about advisers have the technology tools that not only make life easier for them in terms of administration and compliance, but also provide real business benefits – for example, so it’s easy to track which clients have which products and those that, for example, may be under-insured or under-protected. Technology should be an enabler, it should not hinder the adviser or make it more difficult to conduct business. Our system is there to facilitate and to improve the adviser’s lot – by automating tasks we are freeing up adviser time to spend with clients.
FR: If you were not working in financial services, what do you think you’d be doing?
I like to cook so I could imagine me in a little Bistro with maybe a deli attached. I wonder how much difference there is between the FCA and the Food Standards Agency.
