Directly Authorised firm approvals plumet.
The Freedom of Information request by Network Consulting Services shows that the applications approved by the FCA for both Mortgage and Wealth firms have declined rapidly for the past five years.
What does this tell us?
Difficult to say really, however we can take an educated guess that at some contributory factors.
Consumer Duty - is it the increased responsibility, pressure and cost that this has created for firms? Whether perceived or actual.
Threshold Conditions - Is it the increased focus on capabilities and experience the FCA have implemented on any would be DA firms?
Application process - Is it the whole process which has certainly become more prescriptive over the past few years?
I wish I knew the answers. I suspect it is all of the above and perhaps many other factors. I'd love to hear thoughts on why any readers in the adviser community put off a DA application. Or even if they think that this is "lies, damn lies and statistics", to quote Dr Samuel Johnson.
Going Directly Authorised is the right thing to do for some firms but not all. However, the facts are there and there has been a massive decline, with mortgage firms approvals less than 30% of what they were 5 years ago and Wealth firms a little over 36% of what it was in 2020.
The network model still offers value and is the right place for many firms, it falls down to what is right for each individual firm.
The annual network league tables produced by Network Consulting Services will be published soon and it will be interesting reading to see how networks faired last year. Keep an eye on Network Consulting Cherry page, and for the first time, a wealth league table, which will appear in Money Marketing and on Network Consulting web site in February.
Send to a friend
