Commission clawbacks lead to network’s demise
Share
Mortgage network Bridge Home Finance has ceased trading after some of its appointed representatives went into liquidation and it had to stump up for indemnity commission clawbacks.
The network had a policy where its ARs were paid direct by life insurance providers.
John Bridge, director of the network, says that after a few ARs went out of business the network became liable for large clawbacks which meant they could not meet the Financial Services Authority’s capital adequacy requirements.
It has now applied to the FSA to cancel its permissions.
Bridge says he is trying to recoup some of the money owed to the network by ARs.
Bridge says: “We did the right thing and told the FSA that we could no longer meet its capital adequacy requirements because of clawbacks.”
It had around 20 ARs when it closed in August.
If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat
Readers' comments (2)
Anonymous | 21 Sep 2010 10:58 am
Perhaps this will persuade some networks to restrict AR's to taking commission on the drip.
Unsuitable or offensive? Report this comment
Anonymous | 21 Sep 2010 3:48 pm
A good spread of GI business should make up the shortfall in any clawbacks. Last year I was paid about 60K in protection commission with a further £5,000 in GI renewal. This is a steady income and will hopefully support any clawbacks when I leave the industry. A good reason to support the sale of GI.
Unsuitable or offensive? Report this comment