“This certainly doesn’t fill us with love and enthusiasm for Sanlam.”
But while Sanlam said it regretted having to make the decision, it defended the reasoning behind moving to a new fee structure, citing increases in costs due to industry changes and regulation, such as upward hikes in professional indemnity cover and the FSCS levy.
Mr White said it was also so the firm could ensure it could keep control of the advice process and make sure advice being given was to the required regulatory standards.
He said: “The new few structure has less to do with the direct costs of regulation, as these come with the industry. We know that we have to take these costs into account.
“But these costs are increasing and starting to hurt firms more, which is why many firms like the security of a network so they can stabilise their costs.
“Raising the fee means we can be sure we keep control of the advice process and advice is to the regulatory standards required. It allows us to ensure ARs’ cases are being reviewed accurately and on time, and that they have good training and competence behind them.
“Narrowing the network membership and concentrating on larger firms that can cope with this is a preference.”
In the email Sanlam expressed regret at having to make this decision, acknowledging the impact it might have on some.
However, according to the email: "In the current regulatory environment, [we] need to ensure Sanlam Partnerships is sustainable and will provide us with a platform for growth during 2020 and beyond.
“We will continue to provide a robust regulatory environment for our members and the implementation of a minimum fee enables us to maintain our continued high standards for your business and also enables your business to continue to operate as you are now.”
Mr White pledged that Sanlam would work with firms to make the move to the new fee structure as smooth as possible.
amy.austin@ft.com
What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.
