Why Independent Advisers Are Outgrowing Networks

The network model served a purpose

For many advisers starting out, networks provided a valuable stepping stone. Compliance support, back-office infrastructure, and a ready-made investment proposition allowed advisers to focus on building client relationships without the overhead of running every aspect of a regulated business.

But as practices grow and ambitions evolve, the network model often becomes a constraint rather than an enabler.

Where the friction starts

Revenue sharing

Networks typically take a share of adviser revenue, often referred to as an override. This can range from 5% to over 20%, depending on the network and the services provided. For a practice generating GBP 500,000 in annual revenue, a 15% override represents GBP 75,000 leaving the business every year.

As practices grow, this cost becomes harder to justify, especially when the services provided do not scale proportionally.

Investment proposition restrictions

Most networks operate a centralised investment proposition or an approved panel of funds and DFMs. While this simplifies compliance, it limits the adviser’s ability to offer genuinely bespoke portfolios to clients who need them.

For advisers serving HNW clients, this restriction can be a deal-breaker. These clients expect personalisation, and a constrained investment proposition makes that difficult to deliver.

Platform limitations

Networks often mandate or strongly encourage the use of specific platforms. This can mean advisers are unable to choose the platform that best suits their practice and their clients.

Brand and identity

Within a network, an adviser’s brand is always secondary to the network’s. Clients may associate their experience with the network rather than with the adviser, which affects enterprise value when it comes time to sell or transition the practice.

What direct authorisation requires

Going directly authorised (DA) with the FCA is not a decision to take lightly. It requires:

Capital adequacy

The FCA requires directly authorised firms to hold a minimum level of capital. The exact amount depends on the firm’s activities, but it typically ranges from GBP 20,000 to GBP 50,000 for advice firms.

Compliance infrastructure

Without a network handling regulatory obligations, DA firms need their own compliance framework. Options include:

• In-house compliance officer (suitable for larger practices)
• Outsourced compliance from a specialist provider
• Hybrid model combining internal oversight with external support

Professional indemnity insurance

DA firms must arrange their own PI cover. Premiums vary based on AUM, client numbers, and the types of advice given.

FCA application

The authorisation process itself typically takes three to six months. The FCA assesses the firm’s governance, financial resources, and the competence of its key individuals.

The FCA’s authorisation guidance ↗ sets out the requirements in detail.

The case for MFO solutions

One of the main barriers to leaving a network has traditionally been the loss of investment infrastructure. Building an in-house investment team, establishing custody relationships, and managing portfolio operations is expensive and complex.

Turnkey multi-family office solutions have changed this equation. They provide:

• Institutional custody through recognised custodians
• A broad investment proposition spanning multiple asset classes
• Regulatory support and compliance frameworks
• Branded reporting and client portals
• Operational infrastructure that scales

This means advisers can achieve genuine independence without building everything from scratch.

Making the transition

Plan well in advance

The transition from network to DA is typically a 6 to 12 month project. Start planning early and do not underestimate the administrative workload.

Communicate with clients

Clients need to understand what is changing and why. Most will follow their adviser, but clear, honest communication is essential. Frame the move in terms of the benefits to the client: more personalised service, broader investment options, and a direct relationship with the firm.

Invest in infrastructure

The first year of independence requires investment. Technology, compliance, and operations all need to be in place before you leave the network. Cutting corners here will create problems later.

Consider the economics

Model the financials carefully. The override you stop paying needs to cover the costs of compliance, technology, PI insurance, and any additional staff. For most established practices, the economics are favourable, but the break-even point matters.

The trend is clear

The number of directly authorised advice firms in the UK has been growing steadily, even as the total number of advice firms declines through consolidation. That tells you something: the advisers who are investing in their futures are choosing independence.

The network model will continue to serve a purpose for smaller practices and newer advisers. But for established wealth professionals with a clear vision for their practice, going DA is increasingly not just viable. It is the better choice.