A variation of the following article originally appears in Professional Adviser.
For Rimbal proposition ValidPath, independence is not just about offering advice, but about creating a service model that allows advisers to serve clients in an “authentic and unbiased way, all while staying competitive and reducing costs over time,” MacNee told PA.
MacNee said that independence is an “inherent quality” that defines an adviser’s business model.
“There’s a growing trend in the industry where firms say they’re independent, but when you dig deeper, they are tied to certain platforms, products, or financial structures that don’t align with true independence,” the CEO said.
For MacNee, financial adviser independence is about having the freedom to offer the best solution for the client.
“If you’re tied to a platform or a specific product, your ability to offer truly independent advice is compromised,” he said. “That’s not to say that a restricted proposition can’t perform a very good function for a certain subset, but there’s no way you could say a restricted proposition is a better framework than independent as far as that entire market is concerned.”
While some advice firms may claim to offer independent advice, MacNee noted that many are still tied to platforms, product providers, or even external partners that influence the advice they provide.
“The difference is clear,” he added. “True independence means they are free from these ties, using all the tools in the financial toolbox to deliver the best possible outcomes for their clients.”
One of the biggest trends in the financial advice space in recent years has been consolidation, MacNee highlighted.
This comes as the industry faces demographic shifts, with many advisers nearing retirement and many advice firms are being acquired by larger entities, including private equity-backed consolidators.
“These consolidators promise increased efficiency, economies of scale, and greater technological capabilities. But for many IFAs, the promise often comes with a catch, the loss of independence,” he said.
For MacNee, consolidation often hinges on merging adviser’s clients and assets into specific platforms or products, which may not always be in the client’s best interest.
The IFA network saw this as a “major problem” and responded by developing its succession solution programme — an alternative to consolidation that supports firms in exiting their businesses while maintaining their independence.
“Many IFAs struggle with the prospect of consolidation because it often results in advisers being absorbed into larger organizations with restrictive covenants, reduced autonomy, and limited opportunities for growth,” MacNee said.
“For those seeking a more sustainable exit strategy that allows for continued independence, ValidPath’s solution provides an attractive option.
“While consolidation may promise more advanced technology, MacNee does not see technology as the primary motivator for advisers looking to sell or exit. We’ve seen that a lot of advice firms are running away from bad tech, rather than actively seeking good tech. Often, they don’t know what good technology looks like when they’ve come from outdated systems,” he said. “However, we believe technology is a key enabler for firms looking to grow, improve efficiencies, and scale their operations. It’s not the driver, but it’s essential for firms looking to remain competitive.”
For ValidPath, the goal is to help IFAs leverage technology to improve operations, serve clients more effectively, and ultimately grow their businesses.
“This is particularly important for advisers who may not have the technological infrastructure to compete with larger firms or consolidators,” MacNee concluded.
Back in February this year, ValidPath offered financial support to appointed representative firms transitioning to its network that face “golden handcuff” exit penalties.
The IFA network said it had launched a funding “solution” to support established firms that wanted to leave their current network but felt “shackled” by exit terms that could have a negative effect on their business cash flows.
