Adviser

            Community

The Independent Resource for the Financial Adviser Community.

Site Map  Home

My Network is Better Than Yours

My Network Has Whole of Market Access For Insurers.

Network A, allows you to go anywhere for insurance so you have the full choice of insurance products to give your clients the very best deal. Network B, has a very comprehensive panel, network C, a very small panel.  Does it really matter?

Yes is the short answer, although as you may well have guessed, the answer does have qualifications.  For example as a mortgage broker, although my network had a fairly comprehensive panel, I personally never used more than about five insurance companies, principally because I considered that these companies offered my clients who were generally a pretty average bunch the best value for money.  

Single tie however can be another matter, it’s not everyone's experience but from feedback we have received many brokers tend to find this just too restrictive.  Usually more helpful than whole of market access for insurance sales, some networks give their AR’s access to specialist insurance agencies who can assist in difficult to place cases.

My New Network Says it Has Everything I Need and is Perfect For me

The man from the Urban Spaceman Network that I spoke to has already told me they pay top commissions, have the best software, the best compliance, a free CRM system that I'll wonder how I managed without and will generally treat me better than my parents!

Basically it comes down to sales techniques.  Whilst any good network would never dream of lying to prospective AR’s to lure them on board, it can be taken for granted that they will push forward their good points while being a lot less forthcoming about their less attractive features.   “We’ll take only a 10% retention” might sound really good “We have a tiny insurance panel and often take 60 days before you actually get paid on most insurance business” possibly less so!

Of course the good news is you now have Which Network to help you cut through the fog.

My Network Costs Less Than Yours

Network A charges 12%, Network B charges 9%.  Open and shut case then, but what if Network A has a £5,000 pa minimum retention.  What levels of business would you have to write to make it a better choice?  

The answer to the question is that at 9% retention rate if there were no other costs then you would have to write just over £55,000 in order to reach minimum retention levels.  If you wrote £40,000 for example then you would actually be paying 12.5% retention in order to achieve the £5,000 minimum retention amount.  This is of course a massive simplification since you might well be paying software, PI insurance and other monthly costs as well as a retention, all of which might or might not count towards the £5,000 annual minimum.  Before signing up to any such charging structure you would do well to look cold and hard at your last 3 years income and decide if over the next 3 years you are sure to make the £55,000 minimum.

My Network Pays Higher Commissions Than Yours

Network A pays 189% on a particular Insurance, Network B pays 185%, Network C pays 179%, cut and dried then isn't it?  Well not necessarily!

Firstly you have to consider if network A is using loaded premiums?  This isn’t necessarily a bad thing since the effect of this depends how you work, but it is a consideration.  Another consideration of course is whether the policies are 2 year or 4 year clawback period, but in both instances it is important not to take these figures in isolation.  Network A might indeed pay out 5% more commission than network B however compliance issues, the size of insurer panels and even product training could well mean that a broker would actually write 20% more insurance business with network B, completely dwarfing the difference in commission levels.

If you are currently looking for a new mortgage network we can help.  Please click here for our contact form or click on the following link if you wish to know more about Which Network Ltd