High FSA fees and consolidation to blame as AR numbers slump
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More than 800 appointed representatives have left the mortgage market in the past 12 months, Financial Services Authority figures show.
Figures compiled for Mortgage Strategy by Gary Watts, director of the Which Network, show 874 ARs quit between Q2 2010 and Q2 2011, down from 8,085 to 7,211.
Robert Sinclair, director of the Association of Mortgage Intermediaries, says there are now fewer than half the number of the ARs in the market than there were at its peak.
He says: “The drop in AR numbers can be attributed to ongoing consolidation in the market between broker firms. Many brokerages are going out of business because they cannot afford their FSA fees.”
Although AR numbers are down, Sinclair says directly authorised numbers appear to be steady.
He adds: “We are starting to see a slowdown in the number of ARs leaving the market and we expect the numbers to stop falling considerably by December this year.”
Openwork saw the greatest overall fall in numbers during the period, gaining 13 but losing 33 ARs, a net loss of 20.
But a spokesman for Openwork says the figures on the FSA register are not just AR numbers but introducer firms as well.
He says: “Year to date, Openwork AR numbers have stayed consistent, with a net loss of only six advisers.
“With the recent appointment of Mark Duckworth as managing director of distribution, recruitment will now be a key focus for us. The outlook is already positive, with more than 20 new firms in the pipeline to join us.”
Sesame remains the largest network in terms of AR numbers, followed by Personal Touch Financial Services and Openwork third.
Virtual Net, Unleash Advice Partnership and Newleaf are the smallest networks.
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