The network’s strategy appears to have paid dividends judging by its financial result for 2014. Pre-tax profits increased marginally to £483,176 from £482,895 in 2013, despite turnover falling to £46.6m from £51m the year before.
Sense network meanwhile has taken a different tack. Despite the heightened financial burden on independent firms post-RDR, the network has maintained this model.
Another element that has remained unchanged is its membership levy.
For an advisory practice with one adviser the firm charges £250 per month, including access to Intelligent Office and AdvisaCenta tools; 7.5 per cent retention on first £200,000 of turnover per annum, reducing to 5 per cent thereafter and an additional cost of £75 per file when pre-approval is required.
The membership fee excludes the FSCS levy, FCA fees and PI cover, which members are expected to arrange independently.
Tim Newman, managing director, said the firm has further augmented its proposition to advisers through investment in technology and research to streamline the advice process.
The development of Sense’s business model has been positive for the business financially. Parent company Sense Adviser Services’ latest financial statement revealed a pre-tax profit of nearly £868,000 – up on the £646,600 for the previous year.
He added: “We believe in sensible, carefully managed, organic growth. We have 103 member firms with no desire to become a large, cumbersome network, with top down edicts to our members restricting the way in which they advise clients.”
True Potential
In 2014, financial services group True Potential, unveiled True Potential Associate Partners – its adviser network business.
The launch of the network, which falls under the regulatory control of True Potential Wealth Management, the advisory business, took many industry commentators by surprise in the wake of the total collapse of formerly established networks including Honister Capital and Alpha to Omega, which crumbled under commercial and/or regulatory burdens.
At the time of launch, Earl Glasgow, senior partner at True Potential Wealth Management, said the introduction of RDR had make the old network model unprofitable and “unworkable”, adding True Potential Associate Partners offers a modern alternative.
Daniel Harrison, senior partner at True Potential, said: “True Potential provides far more integrated systems, processes and controls than you would typically associate with a traditional network.
“An adviser might be viewed by some people as a salesman under the traditional model. Using technology, we have designed a service where the adviser can put the client in control while retaining full oversight and being on hand whenever the client needs support.”
The network, which operates a hybrid restricted and independent advice models, charges its members 5 per cent all-in for investment business.
