The move comes as part of the network’s five-year plan to create a smaller, higher quality advice network with a focus on consumer outcomes and professional standards.
An integral part of the network’s bold and progressive corporate strategy has been a period of planned, natural attrition. Since implementation began member numbers have reduced from over 700 at the end of 2011 to just under 400 currently, albeit with increased corporate productivity and turnover as a result.
The decision to ask a further 16 mortgage and protection authorised firms to leave the network has been made after a programme of measures to improve quality and is based on the need to ensure advisers in the new organisation are all productive, highly trained professionals who can commit to delivering good consumer outcomes.
All firms will be given advice and support to minimise any disruption to ongoing business and to protect the needs of consumers during any transition process.
Earlier today Personal Touch mailed all member firms meeting its strategic criteria for ongoing membership detailing these changes and announcing a freeze of Personal Touch support fees.
David Carrington, marketing director of Personal Touch, said: “We realise that the news will impact on those firms given notice and we are keen to ensure that we provide as much help and support as possible to everyone affected by this decision.
"In order to give firms time to make alternative arrangements, to allow a smooth departure and to ensure there is no consumer detriment to clients with pipeline business we have written to them well in advance to inform them that we will be issuing notice which has the effect of placing them in a formal notice period from 29th November.”
“In the meantime these firms may continue to write business on the same terms and commission payments will continue to be paid subject to the standard terms of their appointed representative agreements. We have experts in novation and FCA regulation who will provide each firm with help to minimise any disruption both to their own business continuity and to their clients.”
During 2012 Personal Touch began implementation of its new business strategy with the introduction of a new fee structure, the appointment of a new executive team and staff realignment – all of which were designed to reduce costs whilst increasing the focus on providing good consumer outcomes. The business has moved to a more consumer focused membership to ensure future stability and growth.
Max Wright, CEO, added: “Our business strategy is indeed a bold one and for an industry traditionally obsessed with number-counting and distribution volumes it may appear very radical, but even in the past 18 months we have already started to see the positive impact with improved productivity and turnover. I am particularly proud of our staff and members and the fact that we are one of only a small number of networks with a robust financial position who has ended the past year in profit.
“Our focus on quality has been warmly welcomed by product providers, lenders and of course our adviser members, who have chosen to grow with our new, more efficient and wholly consumer-focused network. Importantly, LDC, our largest major investor, showed great support for our new business strategy, demonstrating their ongoing belief in our future prospects with a significant cash injection adding to our robust financial position."
