The biggest talking point relating to networks over the last quarter, according to Paul Day founder of Network Consulting, was the sale of Tenet Network or the several brands which sit under Tenet Group.
“For the past few years Tenet has been the subject of many negative press articles regarding the implementation of a new back-office system and financial losses along with the sizable reduction in the number of AR firms it supports. Given this coverage, many may well have thought a sale or worse was an inevitable conclusion”.
Day adds: “To see such a long standing and well-known network exiting the market was a sad day for the industry, but I’m sure the advisers and firms affected will breathe a sigh of relief when it’s all over”.
Tenet Lime is being sold to Primis Network under the LSL Group, while the other two brands are being sold to Openwork and 2Plan. It is anticipated that the sale and transfer of AR’s is anticipated to conclude at the end of Q1 or early Q2 next year.
The Network League Table produced here, illustrates the movement of appointed representative Firms (AR’s) firms in a given time period and highlight network trends.
The table shows AR movement for the 2023 from January to end of September.
As Day explains it should not be used as an indication of which networks are ‘best’; this is subjective and any firm or adviser should do their own research and due diligence bore joining any new principal.
When looking at overall AR movement this year, the table illustrates that there are contrasting net growth results. Beginning with Tenet, the trend of AR losses continued in Q3 with 33 firms relinquishing their AR status with the network.
The net loss of AR firms for the year totals 65 AR firms, which represents 18.2% of their current AR member firms. Although, in percentage terms, Envelop have lost almost double that this year, with a net loss of 34.1% of their firms. However, they are considered to be a smaller network and this actually only equates to 15 firms.
The networks with the largest net growth this year are 2plan (28), Stonebridge (28) and HL Partnership (21). While the networks with the largest net growth in percentage terms in 2023 are Cornerstone with a 34.1%, representing 14 firms and TMG boasting an impressive 46.9% with an increase of 15 firms.
TMG recently received some attention from the FCA with their use of trading styles in transitioning AR firms from other networks in their fold.
TMG Networks managing director Jonathan Needham comments: “Our growth has been rapid and as a consequence we were delighted to have the opportunity to engage with the FCA earlier this month, we are looking forward to building an effective relationship with them as we continue on our journey.”
Cornerstone network growth director Phil Emanuel says: “We are delighted with the growth seen in 2023 and have a strong pipeline in place for the rest of the year and into 2024.
“The Cornerstone Network is attracting forward thinking ARs who are drawn to our focus on real-time compliance and technology focussed operation – delivering a relationship-based service but with a digital first approach. We fully expect to see similar growth levels next year.”
Earlier this year, there was some speculation that the implementation of the AR regime and preparation work for Consumer Duty could impact overall AR numbers negatively.
Indeed, as Day points out, in Q1 2023, there was actually 99 more firms that left networks than joined, since then however, the numbers seem to have stabilised as the differential is now 89 for the entire year to date.
“Clearly some of these firms may have exited the industry or gone directly authorised but I for one don’t think the latter is a trend. I actually speak to more coming from DA to AR than AR to DA, although not enough to represent a trend either. The next table will be a 2023 round up, so could make very interesting reading”.
“Finally, Sally Laker announced her retirement from Mortgage Intelligence after 27 years holding a steady ship since its inception in 1996. I personally would like to thank Sally for her contribution to the industry and wish her well”.
