Directly authorised or under a network
How succession options differ for directly authorised firms and for appointed representatives of a network.
How succession options differ for directly authorised firms and for appointed representatives of a network.
In both cases the question is what happens to your clients when you stop, and the options open to each differ.
You carry the permissions and therefore the whole weight: SM&CR accountability with your name on it, the governance calendar, the returns, the PI renewal, the file review programme, the Consumer Duty framework and the job of interpreting every new expectation the regulator publishes.
You have complete control. You chose the service, the platform, the process and the people.
The common risk is that one person becomes the compliance function, the operations function and the adviser, and the first two grow until advising is done in the evenings.
Some of that weight is carried for you. You pay for it in fees, in constraint, and in a service and platform chosen by somebody else.
Two problems are common. The fee rises whatever happens to your revenue, and it is not obviously connected to what you receive. And the network's succession route belongs to the network. The options offered to a member thinking about retirement are the options the network has decided to offer, and they are structured around the network's interests, which are not identical to yours.
The second matters more, because a succession route you do not control means the network decides how you exit.
Securo separates the advising, which you keep, from running the business around it, which moves to Equity & General.
From directly authorised, the change is that compliance, paraplanning, administration and infrastructure move to Equity & General, and the personal weight of running a regulated business goes with them. You keep advising and you keep the firm.
From a network, the day-to-day change is small. The larger change is the exit: a defined, priced destination, agreed in writing before you join and set out in your own arrangement.
In both cases the fallback is written in from the start. If terms cannot be agreed when the time comes, your clients are novated to a host of your choosing. Without that fallback, the only exit would be the sponsor’s own offer.
Whether either of those suits you is a separate question, covered on its own page.
Fifteen questions about your clients, the transaction and the buying firm.
Read it
What novation means for a client, and why Securo writes it into the arrangement from the start.
Read it
The documents and records a buyer asks for, and how to have them ready before the request arrives.
Read itSteven Bates, Director of Advisory at Equity & General, takes the first call with every adviser. Ring him on 020 8396 0486 or send a short note about your firm.