Network Review: Sizing up the market for the new year
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A quarterly round-up of appointed representative networks
Following the cover story in last week’s Mortgage Strategy on networks, Which Network’s latest league table gives an indication on appointed representative firms’ movement over the last quarter and 2009 as a whole.
The passing of 2009 has seen 11 networks lose ARs in one way or another and this accounted for in excess of 1,600 firms exiting the register. Undoubtedly some of these firms have been appointed by other networks.
The total number of firms showing under the listed networks at December 31 2009 was 7,858, whereas at the beginning of 2009 it was 9,510, an annual reduction of 1,652. Coincidentally, this is close to the number of firms the networks no longer trading were responsible for - 1,669.
Obviously, it would be foolish to consider that this is the reason for the drop in registered AR firms. But it could be said that seeing their network go under was probably the final straw for some disillusioned advisers.
Although we have helped a large number of advisers find the right home for their business, a considerable percentage of our enquiries (in keeping with the myth) still think that size is important.
But if one lesson can be learned from this years’ volatility it should be that it is not all about the number of AR firms a network has.
Interestingly, we are also seeing advisers heading for safety in numbers by joining larger firms as registered individuals, therefore relinquishing their AR status.
While this is understandable it is based on a false premise as far more individual practices have gone into liquidation than networks. As they are significantly smaller the event is generally viewed as less newsworthy.
A number of firms have gone directly authorised and, unfortunately but perhaps not surprisingly, a substantial number have exited the industry.
Those advisers that do remain have done exceptionally well and now that we are seeing real green shoots of recovery they will hopefully benefit from a more prosperous tomorrow.
There are some increases in AR numbers for the year for particular networks and when considered in percentage terms they are a notable 34% for Mortgage Support Network with a net increase of 22 firms for the year, 37% increase for Mint with a net increase of 41 firms and a 54% increase for Home Loan Partnership with a net increase of 63 firms on the year. I’m sure these networks will be happy if their profitability increases by the same margin.
PAUL DAY
DIRECTOR
WHICH NETWORK
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