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Choosing a Mortgage Network

Before anyone picks up a glossy brochure or trawls the Internet looking at what's on offer, you need to stop and think about your own business. What do you want from the network, the future and most importantly what is right for you. Often advisers make a mistake of joining a network or organisation because someone else said it is good. Being "good" and being "right" are two completely different things, a pair of waterproof boots are good, but not if you're going swimming.  

Moving or selecting a network can be a difficult task compounded by each network stating their proposition is the best without giving real consideration to your business. Isolate your needs; consider these answers as your true drivers.  After which, consider your preferences, what you would "like" to have and make a clear distinction between "must" and "like" to haves'. For the would be Appointed Representative there is no bespoke offering in the market place, inevitably there will be some compromise to a greater or lesser degree.  So be prepared to make a compromise on the preferences but try and stick to your main drivers.

How to make the right decision

Financial security - Ensure you feel confident with the networks finances. Last published accounts can be obtained from companies house. Be aware that this information could be 18 months old, so look at previous accounts for obvious trends.  Further business referencing tools are available, these aren't geared towards the financial services industry and are more expensive but can still be useful. Does the network have a parent company or controlling influence? If so check out their accounts and consider their appetite to remain a supporter of the network. Remember financial security is not just about size, how much turnover or profit the company has or even how much they have in the bank. Consider the overall model including charging, running costs and number of staff, is it sustainable?

Charging structure - Transparency is key, can you see what you are being charged easily. Consider what you get in return, is it value for money, and more importantly does the structure have longevity. If it doesn't then you could be in for a nasty shock when charges increase or even worse the network ceases to be after it runs into financial difficulty. Confirm what is included, software, Professional Indemnity Insurance, FSA fees, compliance fees and be aware of penalty charges.

Compliance regime - Compliance is both integral and important in financial services. However you may be confident in your own abilities and would like to be given a degree of flexibility conversely you may want to stay on the designated tracks without deviation. Networks' interpretation of the FSA guidelines differs greatly and if you make the wrong selection it could prove a very uncomfortable ride or even worse.

Commission rates and procuration fees - Surprisingly many advisers overlook this and concentrate on the headline charging percentage of the network. If you are only charged 5% but the life commission is only paid at 100% API, then the net effect is a much greater charge. Compare some of the providers frequently used and look at the gross commission.  Loaded premiums are is still in the market place and if this is an important factor in making your decision, be sure to ask the question of the network.

Support services - Marketing support, web presence or even increasing your permissions. Lead generation should always be approached with care as it is rarely as good as advertised and is often supplied by a third party that could be used independently of the network. Do you need active field support or just have the ability to call upon support when it is required? Other ancillary services may be important to you such as a route to refer investment business or equity release. Would you like to increase the number of advisers or have a training facility to develop existing advisers?

Other considerations must be given to the business submission process, back office and sourcing systems. Professional Indemnity Insurance, what is covered and what is your excess liability should the worse happen? Check the networks contracts particularly exit clauses, if you need move on, you do not want a clause making it prohibitive for you to do so.

The character of the network is often apparent by the way it operates and the people who run it, this can cascade down to the advisers. As a result some advisers may decide that networks aren't right for them and want to consider becoming directly authorised or even a registered individual with another firm. Still do your home work and with the latter be certain of client ownership.

If you are unhappy in your current home, isolate why. Be aware of the warning signs, one of the first signs of instability in a network is delayed commission payments. If delays are increasing and more excuses are being communicated then you should assess your exposure and initiate an exit strategy.

Doing your own research can be time consuming and difficult you have a colleague who is apparently happy with the network they use however, remember, their business is not the same as your business and you will almost certainly have different likes and dislikes.

Network choice is a major decision, so don't take it lightly.  Which Network Ltd are the UK’s premier independent mortgage network consultants, and we not only ask the mortgage networks all the relevant questions, but we also have sufficient knowledge and industry experience to know when the answers they give have the ring of truth, or are just marketing spin. Remember, we work for you and nobody else!

Click Here.....If you’re a Mortgage Broker looking for the right network for your business