Starting a new financial advice business is an exciting endeavour filled with opportunities to make a significant impact on your clients' financial well-being. However, the journey is fraught with challenges.
The financial planning industry is heavily regulated, and rightly so. However, this regulatory landscape can be particularly challenging for new businesses. There are numerous rules and regulations to adhere to and without thorough preparation, you could easily encounter serious issues, especially when it comes to choosing the right professional network. The network you affiliate with can make or break your business. Here, we explore the perils of being a new financial advice business in the wrong network and provide guidance on making the best choice for long-term success.
Lack of credibility and trust
Joining a network with a poor reputation or regularly facing critique in the media can severely damage your credibility, even if your business is running smoothly. When potential clients conduct their due diligence, they seek financial advisers that they can trust with their hard-earned money. If your affiliated network is known for unethical practices or a lack of transparency for example, potential clients might view your association as a red flag. Building trust is a cornerstone of the financial advice industry and your network plays a crucial role in establishing this trust.
Inadequate support and resources
Setting up any business is hard and new financial advice business principals need robust support systems to navigate the complexities of the industry. Networks that offer limited resources, outdated technology or insufficient training can leave you ill-prepared to serve your clients effectively. The right network should provide continuous professional development and comprehensive support services to help you to grow your business and improve client outcomes.
Misaligned values and goals
Every financial adviser has a unique vision and set of values that guide their practice. Joining a network that doesn't align with your professional philosophy can lead to conflicts and dissatisfaction. For instance, if you prioritise holistic financial planning, but your network focuses solely on product sales and commissions, you may find it challenging to stay true to your principles.
Regulatory and compliance risks
The financial advice industry is heavily regulated to protect consumers and with the introduction of Consumer Duty on 31st July 2023, there are further measures businesses need to take to ensure good practice for customers. Associating with a network that has a history of compliance issues can expose you to legal risks and regulatory scrutiny. This can result in fines, sanctions and damage to your professional reputation. Ensuring that you partner with network that maintains high compliance standards is essential to avoid these pitfalls.
Poor client acquisition strategies
Successful client acquisition is vital for any new financial advice business. Networks with ineffective marketing strategies or a lack of emphasis on client acquisition can hinder your ability to build a solid client base and futureproof your business. A supportive network should offer guidance and tools for marketing, client outreach and retention to help you to establish and expand your client relationships.
Why Sense… makes sense!
Selecting the right network is one of the most critical decisions you will make as a new financial advice business. It requires careful consideration of several factors, including the network's reputation, support infrastructure, values, compliance record and client acquisition strategies.
Whatever stage of your journey, you want to run a business that reflects your own personality and values, giving you a sense of control and the flexibility to do things your own way. Yet networks too often stifle the very creativity and individuality that financial advisers bring to the table. We don’t see the point of that. At Sense, we provide an environment that embraces individuality and flexibility, for businesses that want to develop, grow and be creative in their own unique way. We will match the passion that you have for your business and your clients. We are here to support you and your business with your chosen advice proposition whether you want to build your own proposition from the whole of market or take advantage of our in-house expertise.
But that isn’t where the support stops. Our novations and agencies team works closely with all providers ensuring a smooth transition with minimal disturbance to you, your clients and your ongoing revenue. We also don’t leave you in the dark once you have moved onto our systems. Our dedicated iO support and data migration teams offer a robust and personalised training service to further ensure minimal disruption to your client base along side a dedicated support team for any ongoing queries.
Increasing regulatory compliance and rising back-office costs have prompted many financial advisers to take a greater look at the way in which they run their advisory business. As a result of these increases, we have seen a dramatic surge in advice firms of all sizes approaching and joining the ASHL Group networks.
An example of these costs would be Professional Indemnity Insurance (PII). If you go right back to the FCA retail intermediary data from 2017, the FCA was showing a range of average PIIs from 1.9% up to 2.7%, and that's for firms with turnover between anywhere from £100,000 turnover to £10,000,000 turnover. We've seen that steadily increase over the years, with the 2023 data from the FCA highlighting a nationwide average of 3.2% to 3.5%. A steady and significant increase over that time period. Sense firms premiums, however, continue to compare favourably against the industry average.
Currently, contributions across the Network stand at an average of 1.54%, for compliant PII which has landed us in the BareRock ‘club 20’.
Supporting both independent and restricted propositions, to find out more about why Sense makes sense, check out our services and benefits brochure here.
If a pre-built proposition is more your thing…
Lyncombe is the ASHL Group’s industry leading pre-built proposition, where we have conducted the initial and on-going full research, due diligence and design decisions, enabling you to focus exclusively on what matters most, client advice and service.
We continually research the whole market to build a compelling proposition with a mixture of panel and whole of market providers across all advice areas, delivering extra value for your clients from negotiated discounted terms, not available to individual firms. Critically, we deliver a comprehensive range of fully risk managed investment solutions for active, passive, sustainable and income vehicles via a range of different investment solutions types through our inhouse investment proposition, Rockhold Asset Management.
Rockhold was established to design and oversee investment solutions. Keeping them under constant review with the aim of helping your clients to achieve their investment objectives. Rockhold has gone from strength to strength in the four years since its inception, with >25% of the IFA community embedding Rockhold at the core of their advice proposition.
In the Defaqto DFM Satisfaction Study 2024, Rockhold attained the largest number of top performing categories (12 out of 14) viewed as most important for DFM firms, as ranked by advisers. These included the top 5:
- Service
- Quality of staff - Investment
- Ease of doing business
- Investment flexibility – range of assets
- Investment flexibility - range of options
When we say that the ASHL Group of Companies wants to set high standards, we truly believe that and we feel that this is a validation of our approach of focusing our services on advisers in the ASHL Group.
To find out more about the suite of support services available to Lyncombe members, check out our services and benefits brochure here.
Supporting you every step of the way
At the ASHL Group, we don’t just support with client acquisition and retention; we also support with staff development further than the typical CPD programmes. We understand our part to play in the future of financial advice and as such created the funded ASHL Adviser Academy powered by NextGen Planners accessible only to Sense and Lyncombe network members. Offering programmes from Administrator all the way to Chartered Level 6, the ASHL Academy brings together the vision and industry leading compliance standards of ASHL, together with the award-winning pedigree of NextGen Planners, to create a programme that can be tailored to the individual’s learning needs so that they can drop inefficient study methods that don’t serve them. This is backed up with a comprehensive set of on demand study materials. Each course is built around developing the candidates’ core technical knowledge, the stills required to be a financial planner and the behaviours to create a sustainable career.
When the time comes that you decide to take a step back, we can help there too. Because we work with a range of firms, we often have principals looking to buy. If you are the right fit then we can support in this buyout. If that doesn’t feel quite right, then this is where the ASHL Group’s national model Lync Wealth Management comes into play. Lync Wealth are committed to delivering growth for your business, opportunities for your team and setting up the perfect conditions to optimise your business’s value.
From working closely with all of our firms and understanding their future plans, we create the correct partnerships together within the ASHL Group. Through our national model, we provide a route of acquisition that allows a consistent and protected client journey. Through our practice buyout programme, an acquired business integrates with Lync Wealth over an agreed period, with the integration and handover mapped ahead.
By choosing the right network, you can position your new financial advice business for success, build lasting client relationships and achieve your professional aspirations. Avoid the dangers of being in the wrong network, and take the time to make an informed decision that will support your growth and integrity in the competitive world of financial advising. Get in touch with the ASHL Group team today to find out more about the Sense and Lyncombe offering.
