Frequently Asked Questions:
No. However, your firm needs to be financially sound in order to adhere to fit and proper rules. There has historically been a link between debt and malpractice in financial services, and we are conscious of that risk.
The network takes corporate governance very seriously and publishes as much information as possible.
There is a tremendous advantage in being a member of our hybrid-network and this aspect of network membership is much under-rated. The trials and tribulations endured by the directly authorised advisers are legion – they have to account to the FCA for capital adequacy on a quarterly expenditure test basis. Not only is this a complex calculation for them but also there is the matter of the accounting treatment of “goodwill.” The goodwill asset uniquely does not count as an asset for FCA directly authorised firms (compared with any other industry). The “goodwill” may even be on-going remuneration of, say, a guaranteed £10k per week, but that will not count when delivering accounts to the FCA’s Prudential department for capital adequacy checking. This aspect alone makes the purchase of other adviser practices a very difficult matter for small directly authorised practices and has led many firms towards joining our network. By joining they benefit from the release of capital from their balance sheets alongside many other benefits.
We would say 4-6 weeks to be realistic. Time delays often come when obtaining references, so you need to watch out for that. Since the implementation of the FCA’s “ONA” (now known as Connect) system for online applications in 2010 some “squeaky clean” applications sail through faster than before but some applications with minor issues have taken much longer to be cleared by the FCA.
For new firms and advisers you can expect 3 visits within the first 7 months of joining and thereafter providing there are no concerns or risks identified you will have 2 x 1-1 visits and one skills assessment per year. On top of visits to advisers the firm will have a full audit every other year with an annual return to be completed every 12 months.
These cases will always be 100% pre-sale checked. In order to conduct occupational transfers between individuals or firm members you will need to be appropriately qualified.
No. We are committed to independence. You are an experienced adviser and should source and justify your own recommendations from the whole of the market. If you decide to work to a restricted model, your restricted range of products will be of your own choosing.
Yes. Our technical team will help you through more unusual cases.
Talk to our technical support people, who work closely with the compliance team. The technical support team includes a wide breadth of knowledge and experience to assist advisers in all the compliance issues they have.
Yes. We very much encourage this.
We have a risk based approach where you will be asked to pay for the FCA Compliant excess (£5,000) on any upheld claim. The full excess amount is £10,000 but we split this with you as an equal partnership. Following an upheld complaint, an individual adviser’s excess will increased to £10,000. If after three years, there have been no further upheld complaints, the excess will be returned back to £5,000.
The policy is normally brokered through Lloyds of London and different underwriters usually take differing layers of risk. The policy is compliant with FCA rules.
Yes, subject to compliance checks before use and annual revalidation.
As a general rule no. However recently there have been a number of advisers who are leaving the industry and keen to share their customers with local advisers who are members of the same network. We do buddy up advisers coming and going with some success. For more information contact a member of our sales team to ask about the Contingency Planner programme.
Yes. Normal network special terms have been negotiated. You will benefit from the best protection rates where applicable.
You control your own CPD and T&C regime in consultation with your Quality Assurance Manager. We do run seminars around the country for members to attend if they wish. However with the changes of RDR and increased emphasis on training & independence we do ask our members to attend two seminars a year (this is mandatory). Meetings generally have approximately ten venues across the UK, Scotland & Northern Ireland so in most cases this does not present too much travelling.
Yes, subject to compliance checks.
No. You deal direct with your existing providers and send proposal forms to them direct. We compliance check your work.
GENERAL INSURANCE AND MORTGAGES: HOW DO YOU DO THE COMPLIANCE AND BUSINESS SUBMISSION IN THESE CASES?
In exactly the same way as with investment business.
We recommend that you take out your own separate PII run off cover if you leave the network. If you want to stay covered on our policy after you have left we ask you to pay a contribution towards the cost. The cost is currently £45 per month for every £100,000 of turnover.
Yes, we are not in the business of giving advice to any of our members’ clients.
MY CURRENT COMPANY TELLS ME I WOULD NEED TO HAVE RUN-OFF PROFESSIONAL INDEMNITY INSURANCE COVER FOR MY PAST BUSINESS. DO YOU OFFER THIS?
If you were part of a network or a larger firm your past business may be covered by their policy, but you need to check with them. If you have been directly authorised we strongly recommend that you seek run-off cover as otherwise you are exposed to the total of any claims made. We can refer you to our PII broker for an open market quote.