Almost 100 more AR firms have left a network than have joined one in Q1 2023, according to research from Network Consulting.
The firm’s analysis of the FCA register comes just over two months before the introduction of Consumer Duty and looks at the period immediately after the implementation of the updated AR Regime in December 2022.
But Paul Day, managing director of Network Consulting, cautioned that people should be careful not to jump to conclusions on the reasons for the outflow just yet.
Day said: “We have to be mindful of not jumping to conclusions on this single statistic, as there are many reasons why network AR member firms move.
“Of the advisers Network Consulting have been talking to, no clear trend for leaving has been picked up as yet and there are still a high level of firms and advisers looking for a new home. So, it’s far too early to draw anything meaningful from the AR firm movements this year so far.
“Many may consider that the implementation of the AR Regime, which requires a network to apply a higher level of due diligence, scrutiny, monitoring and oversight has had an impact on the number of exiting firms. Equally the preparation and implementation of procedures for Consumer Duty could also have had an influence on the numbers, but like I say, I think its too early to assume these are the reasons.
“Another factor is that some networks have set new productivity thresholds, forcing some advisers to leave their network, while other advisers have been taken into other firms within the same network. This has been corroborated with some of my conversations with network principals.
“It is fair to say that many networks are still taking a good number of ARs and advisers alike which is clear from the table, with some openly stating that they have aggressive growth plans.”
Network consulting is an independent service for financial intermediaries, helping them find the best provider solution for their business requirements.
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* denotes multipal principals (networks) trading under one network brand † denotes network hold only mortgage and protection permissions
All figures correct as 07/04/22 – Data source: FCA register
Full data available at – https://www.network-consulting.co.uk/q1-2023-network-league-table
For more information and tips, visit www.network-consulting.co.uk
