Don't Forget Costs

Hi Martin, Some interesting points. Independent financial advisors (IFA’s) like any business look at costs, IFA networks are reacting to this offering fixed fees and moving away from the fee/percentage of business model. Or worse, tacking on extra compliance services. A sort of menu - compliance al la carte. Financial Ltd and others are offering a fixed £500.00 per month fee which includes all PI and compliance costs. This is very attractive when you build in all commission/fees are paid direct into the appointed representatives band account giving the IFA full control of their business. The ‘direct payments’ – kind of negates the ‘network strength’ argument, it at least dilutes it. I feel networks need to react and offer fixed fees. Denis Hall of Yellow Tail described recently the need to sell his main property in order to move to the fee model. I accept Denis is FSA direct, but this exemplifies the need for low network costs. With networks margins squeezed it will be interesting to see what happens in the market. I would suggest less IFA’s post 2012 getting a better deal and the margin’s of networks being very tight. As most lose money now I would love to see their 5 year business plans. In fairness most are backed by large insurance providers with deep pockets, I still feel we may see network consolidation. Either way I predict a much better deal for IFA’s. Richard Bishop www.findanifa.net/blog

Posted by: Richard Bishop