In a letter sent out to members this week, Sesame said members will receive three months contractual notice on 30 April. Although it said the timetable would be confirmed later this month, it advised members that they might have to make a decision before 31 July.
In the list of “likely benefits”, the firm said it would offer continuous income and would cover regulatory fees if its members – comprised of financial advisory firms – choose one of its preferred options: either to switch to the company’s sister company Bankhall or to the group’s “network partner”.
Sesame also said it would cover the Financial Services Compensation Scheme levy on behalf of members, highlighting that it could “do more to help smooth the transition” if they choose one of its preferred routes.
Last week the financial services giant, Sesame Bankhall Group, announced it was scrapping its advisory network for wealth firms in a bid to return the business to profit. This will only affect the investment side of the network and not its mortgage division.
Media reports have cited Intrinsic – owned by Old Mutual Wealth – as the potential network partner, though Sesame could not confirm this.
“Level of support”
In the letter, Sesame’s managing director Stephen Gazard said: “Whatever you decide we will do all we can to help, although I do feel it is important to point out that while we appreciate there are other options available to you, it is simply not feasible for us to provide you with the same level of support on the same terms as we are able to deliver through our preferred routes.”
He added: “I would also like to make it clear that the overriding objective of our AR wealth partner solution is to smooth the transition for you and lessen any disruption on your business and client relationships.”
Members will be given their contractual notices on 30 April this year and have until 31 July to make their decision.
Those firms moving to Bankhall will continue to trade in Sesame until they are granted their FCA permissions, and those switching to the network partner or moving away will also do so on this date.
“Tight time-frame”
However, David Drain, partner at member firm New Discovery Financial Services, said this time-frame seemed tight for those planning to cut ties with Sesame and said he expects some people will go through a period of no authorisation.
“But it’s more reasonable if you plan to go to their partner network or Bankhall because they are not imposing any time limits”, he said, before adding that the concessions were a factor influencing his plan to move to Bankhall.
He added: “Although Sesame had issues, the move came as a surprise because many thought they had got past the issues.”
“Inevitable”
David Barnett, who is a principal at advisory firm DPB Financial Services, was a member of Sesame for 20 years.
“I think scrapping the network was inevitable, but what would be telling is how they carry out the whole business,” he said. “I think it’s strange that they talk about a smooth transition to another network but they haven’t announced which network it is yet.
“It seems to be a bit of a chicken and egg situation.”
