A downside to an independent Sesame Bankhall

We have had the strategic review at Sesame Bankhall confirmed this week, which must make it an early candidate for scoop of the year for the trade paper which broke the news. But there might be a downside for the IFA sector.

Sesame Bankhall is a huge player in IFA affairs. The Money Debate can even remember it being referred to as a mega-network in the trade press long before it took over Bankhall. That also means the fate of Sesame Bankhall is of huge significance for all other advisers.

They may see it as a shame if the network/support services firm was separated from the deep pockets of Friends Life. It strikes the Money Debate as a well-run, well-led business with Ivan Martin and George Higginson at the helm. It is a million miles away from the network model of old.

It would be great fun to see just what parts of the post RDR business are being used to tempt prospective backers, though it would be wise not to underestimate the value of some of the mortgage components as well as the restricted advice proposition.

But that is not really the issue for non-member IFAs at least. Any independent operation no matter how well run, may be more of risk to other advisers if it doesn’t find itself a big backer.

Other industries may show signs of creative destruction. Comet’s demise helps Dixons for example.  It’s a little different in the IFA industry. That involves destruction but given the way in which the compensation scheme operates, it’s often ever destructive destruction.

So if Sesame Bankhall goes independent it’s not the best news for everyone else. That doesn’t mean we shouldn’t wish the management well if they do go it alone. The prize of an independent (in the broad not regulatory sense), profitable advice organisation with many thousands of advisers is certainly one worth striving for. But it would increase the risk for everyone else.

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