Here, we’re offering an overview into what it means to be part of a network, and how to choose the right one. For more in-depth information, we recommend attending a dedicated session through our Adviser Incubator programme!

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Who are networks for?

Traditionally, networks have been viewed as the option for businesses who either aren’t interested in regulation or who need support or guidance with running their businesses. The directly authorised route is attractive for those wishing to be ‘truly independent’. Fast forward to today and it’s quite a different picture.  

As the direct authorisation process has become more time consuming and cumbersome, with more firms being rejected, the networks have widened their offerings, making the network route the only viable option for many new advisory firms.  

Networks are now providing a whole scale of support from simply the regulatory support, right the way through to full training academies. They’re also giving firms the opportunity to operate independently, and it’s this key point that I think is helping with their popularity. Why go through the expensive and time-consuming direct authorisation process when you could run an independent firm with the support of a network?

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Which is the best network for independent financial advisers?

Through our Adviser Incubator programme, The Verve Foundation offers three options depending on which stage of business a person is at. Our first step is the ‘Consider’ programme, which essentially supports someone from thinking about starting their own firm, to making a decision on which route is right for them. Naturally, one of the sessions is around networks and how to find the right one.  

One thing we always stress during this session: we cannot tell you who the ‘best’ network is or which one you should choose, nor do we tell people which is the cheapest.  

And this is for a very good reason; every person and every business is different. They have different visions for their businesses and will therefore have different needs. Much like financial advice needs for different clients.  

So, when selecting a network, these are the 5 main things to consider:

• Start by thinking about you as a person and your future business. What is your ‘why’? What is your vision? How do you want to run your business? And who do you want to work with? This is the best place to start with your business planning. You can fill in more of the detail later, but this should be the starting point. Oh, and write it down – you’ll thank us later!
• Next is to work out from your reflections what your non-negotiables are. For example, if you’re planning on building a business catering to young families, you’ll likely use social media as part of your marketing strategy. So, you’ll likely need to understand the compliance sign-off process for social media posts, and want to ensure this is done quickly enough for you to build your client base.
• There are a number of networks out there and I would recommend having a look at as many as possible, filtering them out using your non-negotiables. Then you can start looking at your nice-to-haves and start scoring the networks on those.  
• From there, you’ll probably be left with 3 or 4 networks who seemingly fit your needs. Take the time to speak to them and really dig into what they can offer you, and how they can support your specific business. Alongside this, seek others within those networks to get some insider views. And – top tip – when you’re asking their opinion, make sure you’re specific. Instead of “what do you think about X Network?” ask “what’s the compliance sign-off process like at X Network?” You’ll be much more likely to get relevant insight by asking more specific questions, and aligning those to your specific business needs.

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When ‘interviewing’ networks, here are a few areas I would encourage you explore:

• Added support – fee reconciliation, admin & paraplanning, tech stack, CPD & training, support to grow, academy pathways, routes to CAS
• Cost – charging model, what you get for it, what’s included (PI / runoff cover), how the FSCS/FCA levy is charged, whether there are any exit penalties
• Structure – do they support independent or restricted models? Who owns the network? Who ‘owns’ your clients? Do they help with succession planning?
• Tech – what software do they use? Do you have freedom to choose? How much do they invest in developing their tech stack? Are they keeping up with modern practices? How robust is their data security and infrastructure?

And finally, once you’ve made your decision, the golden rule – check the contract carefully! Ask questions and ensure you know what you’re getting into before you sign anything. If in doubt, seek legal advice.

The role of the network has changed a lot over the years, and we’re in a great position where there is plenty of choice for new businesses, so choose wisely.

And if you’d like some help & support with that, we’ve got your back. Learn more about the Verve Foundation here on the website, and don’t forget you can start your journey any time by clicking the ‘Get Involved’ button.