How vertical integration affects IFAs and clients (and why Corbel is carving its own path)

Here at Corbel Partners, the driving force behind what we do is our commitment to independence.

And while we are a growing network with plans to keep expanding, we are still dedicated to upholding our independent financial planning principles.

Interestingly, we are witnessing a rapid rise in vertical integration from other advice networks.

Due to the current regulatory demands of our profession, an increasing number of small firms are being acquired or managed by advice networks – but for many, this comes at the price of true independence.

Keep reading to learn how vertical integration affects IFAs and their clients, and why we’re choosing a different path for our appointed representatives and network members.

Vertical integration can stifle independence, future career opportunities, and client outcomes

Vertical integration describes the ownership of not just one aspect of a supply chain, but several.

A good example of how this works outside of financial services is Netflix producing its own shows and films, or IKEA buying its own forest in order to cut down on the cost of wood.

Within the advice profession, vertical integration happens when a large firm acquires small advice businesses and absorbs that firm’s clients into its own system.

Some vertically integrated firms only offer restricted advice, which correlates perfectly with what they can offer – one suite of advice controlled by the larger firm. But others are attempting to vertically integrate IFAs too.

While this does mean that the adviser would be part of a large, robust organisation – gaining protection and help with costly administrative work – vertical integration can stifle independent financial planning.

One could even argue that it’s entirely contradictory to independent planning principles.

Vertically integrated firms may:

  • Be required to convince clients to shift their portfolio towards the larger firm’s proposition, potentially creating mistrust
  • Now need to operate under the name, marketing preferences, and systems of the acquirer
  • Expose themselves and their clients to higher levels of risk – if the integrator were to collapse, the firm and its clients are inexorably tied to it
  • Sacrifice personal career growth and retirement options due to being “locked into” agreements from the outset.

As an IFA who has worked hard to nurture your client base, the idea of pushing clients into your network’s predisposed solution might feel counterintuitive to you. Plus, you might not like the idea of having limited exit options, or the feeling of being restricted when it comes to the type of advice you’re able to give.

That’s why we are not vertically integrating advice firms within our network.

Here’s what we’re doing instead.

At Corbel, we’re carving our own path

Instead of shoehorning our network members and their clients into our own investment proposition, we allow them to remain fully independent, even as part of our network.

This means that Corbel Partners will still take on new network members and appointed representatives, but we’ll never control the unique way they operate. You’re remain in control, while also benefiting from a strong network infrastructure that could help your business thrive.

Our system means that you:

  • Benefit from all the perks of being in a network – compliance, paraplanning, administrative support, training, and mentorship
  • Can access the whole of the market, without feeling pressured to push your clients into a pre-set proposition
  • Are free to market and run your business according to your own goals as an IFA
  • Have the tools to support your clients in the way you feel is best
  • Can look at your future career with a feeling of security, knowing that our buyout proposition is there if you need it (without any pressure to sell to us – more on this later).

We believe that our profession must protect and preserve independence at every opportunity, which is why our appointed representatives and network members will always be free to use our resources how they choose.

Talk to us about becoming part of the Corbel Partners network

We are open to taking on new members of our network.

As a member, you’ll have access to our paraplanning, compliance and administration teams, as well as mentoring and training from network heads, Paul and David.

We’ll help you sit exams, gain relevant CPD, and look after your clients, all using our new bespoke in-house adviser tool that lets advisers fully digitise their operation if they wish to.

If you’ve just established your practice or are looking to make your working life safer and more efficient without compromising your independence, Corbel Partners could be the perfect home for your firm.

On the other hand, if you’re retiring soon, Corbel members also benefit from our guaranteed buyout proposition. Under this scheme, we give you the option to sell your business to us, or to another appointed representative, with minimal disruption to your clients.

There are no strings attached – you are free to do what is best for your business when the time comes.

Although our profession seems to be leaning towards vertical integration, we believe in taking the road less travelled.

Interested? Email or call 01925 637891.

Please note

This article is for general information only and does not constitute advice.

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