The network model, and the various variations of it, is constantly in the spotlight and often under attack from those who, somewhat bizarrely, would like to see its demise. Unfortunately for those who hold this opinion it seems fairly obvious that the network model is not going away anytime soon, given that large numbers of advisers and firms see the true benefits that can come with either becoming an AR in the first place, or moving from DA to AR status in order to secure some of the many advantages and opportunities that a quality network can offer.
That said, I’ll be the first to agree that there are major differences between networks; not all Principals are the same, neither do they operate in the same sectors which is why success is not a constant across the piece, particularly for those with large legacies to contend with, and those that operate in different parts of the market. We made a decision a number of years ago, for example, to exit the wealth management market and instead concentrate on mortgages and protection. It is a decision we believe to have been right at the time, certainly right for today, and undoubtedly right for the future.
A few months ago I read a comment from a large network head which essentially said that, when it comes to being a network, “it’s better to be boring”. Now, I can totally understand this view particularly if your specific network space has been turbulent over the past few years and you are essentially now looking to keep your head down and get on with the job in hand. However, to my mind, it’s possible to be both boring – i.e. having stability, cash reserves, quality systems and processes, a sound structure, good technology – and on top of this be innovative, forward-thinking, relevant, visible, successful and attractive to both your core customers and beyond.
This is just as relevant for advisory firms as it is for networks because the ‘boring’ element is all about the foundations of the business. It’s about getting those as strong as possible and, certainly not neglecting them, in order to develop what should be the rather more exciting ‘building’/business on top. It’s a cliché but without those boring bits, the whole structure will become a heap and therefore firms need to ensure they work hard on to establish the boring elements.
And this is where a quality network can come into its own, because it can offer those firms who perhaps feel their fundamentals are not quite strong enough yet the expertise and support to get them up to scratch, whilst at the same time providing easy access to those products and services which might be described as more exciting. It can carry a twin-threat of supporting and aiding the firm in developing its core offering, while opening up a readily available and existing gateway, with new relationships and partners, to areas which can complement the fundamentals but take them in potentially lucrative directions.
For existing, and potentially new AR firms, the trick is to choose the network that can offer this best of both worlds. To our mind, providing a specialist approach works well for both us and our ARs because it allows us to continue focusing on both the mortgage and protection markets – and all the myriad of opportunities therein – which should certainly suit those businesses who want to achieve great things in these markets.
So, all in all, there is nothing wrong in being boring but it can’t be a constant state of mind for either networks or advisory firms. Sticking to your knitting, as the saying goes, should make you solid but this should also be the stepping stone to other opportunities, providing the confidence to engage with like-minded partners through the network, and to build on the core with more attractive and, dare I say it, exciting opportunities.
Richard Adams is managing director of Stonebridge Group