Critical mass is a term which crops up in the vocabulary of networks when talking about the future of the sector as the key to success.
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Much of the argument behind the network model is that appointed representatives (ARs) have greater sway in the wider market than if they were operating on their own. The same goes for the network, with the assumed logic that the larger the network, the greater the bargaining power they have with lenders.
However, is critical mass the deciding factor in whether a network thrives or falls? Obviously, even the largest network is only as competent as its smallest broker so it is up to the appointed firm, whether large or small, to ensure all its advisers are acting in a manner which guarantees best practice. The larger the company, the harder this can be.
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Also, a firm can have the biggest budget and the most ‘critical mass’ but it has to be applied in a sensible and correct manner to ensure it is used effectively. Otherwise, the firm becomes a cumbersome giant which cannot achieve its potential.
But in an industry where regulation is an omnipotent presence, the ability to invest in technology and services to aid the adviser is an advantage.
So whether critical mass will be the deciding factor remains to be seen. Every business wants growth but it must be remembered that you have to make what you have work first before you look to enhance the model.
