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Brokers speak out against hurdles to leaving networks

Network brokers are unhappy about the ‘excessive’ freeze period typically imposed on their income when they give notice — but networks say it’s justified


Brokers have spoken out about problems encountered when leaving networks, with many saying current network business norms are restrictive and make it difficult to quit.

Most criticism is levelled at the period for which some networks freeze brokers’ income pipelines when they give notice to leave (see box below).

Mortgage Strategy has been contacted about the issue by several current and former network brokers, unprompted, although most spoke anonymously to avoid souring relationships. Brokers say a freeze of their income for several months is unnecessarily long, but networks claim there are sound compliance reasons for doing so.

Once you’re in, getting out of a network is a very hard task. I think that’s often why people stay with networks

Here, Mortgage Strategy examines both sides of an often contentious issue.

Three months

One network broker says he wants to leave to become directly authorised but his network’s three-month pipeline freeze is stopping him.

He says: “As soon as you give notice, they freeze your pipeline immediately for three months. I think that is excessive; the final month should be the most they look to freeze.

“That final month is when the exit process is finalised. What are they going to do in the first two months? Nothing, except sit on your money. It’s weighted in their favour.

“Once you’re in, getting out of a network is a very hard task, and I think that’s often why people stay with networks.”

Another broker says the length of the income freeze imposed by many networks “turns the taps off”, and few brokers have enough savings to tide themselves over until they can start trading again.

One 77 Mortgages managing director Alastair McKee says his former network, Tenet, freezes pipelines until the liability for life insurance sales has been transferred to the broker, and the process for that can also take several months.

He says: “In theory you may get it in a month, if you’re organised. But it may take longer to get to that point. So I’d say on average it would be a three-month freeze.”

Network response

Networks gave a robust response to the criticism, however, saying the process could not be rushed — although there was significant variation in the length of their respective pipeline freezes.

Mortgage Strategy contacted the top 10 networks by size, although not all responded.

Openwork managing director John Cupis (left) says the network requires one month’s notice to leave and then freezes broker pipelines for around six months. He says this period is needed to manage risks from bad advice, and financial risks from protection clawback.

He adds: “The freeze period enables the network to understand fully the extent of those liabilities and the arrangement the firm wishes to make to transfer those risks elsewhere, and over what timescale.”

TenetLime managing director Gemma Harle says the network freezes pipelines for between one and six months, again depending on how long it takes brokers to novate life insurance liability and comply with other exit terms.

She says: “Networks retain the liability for any complaints or clawback, and the ongoing advice liability; therefore novation and return of customer files is a perfectly reasonable request.

“It is worth highlighting that it is in both our, and the respective firm’s, best interests to get matters concluded as expediently and amicably as possible.”

The freeze period enables the network to understand fully the extent of those liabilities

A Sesame spokesman says the firm freezes broker payments until any liabilities have been paid off, and it asks for all client files to be handed over.

First Complete and Pink business operations director Toni Smith says: “Pipeline, as well as ongoing business, should be managed safely and appropriately. When a broker leaves a network it’s paramount that there is a carefully orchestrated process to ensure minimal disruption.”

First Complete, Pink and Stonebridge also cite liability transfer as the reason the process takes so long. Stonebridge managing director Richard Adams says this takes his firm from six to eight weeks.

HL Partnership development director Martin Sims says the network endeavours to novate liabilities away within three months, and will freeze pipelines for that long.


Networks also point out that the terms of use are laid out in the contracts signed by AR brokers.

Adams-Richard-2012Adams (right) says: “In business you need to research properly and read any contract in its entirety before signing. We purposefully keep our contracts short to make this less onerous.”

Cupis says: “Advisers and firms cannot join a network without signing a contract so that matters are made clear up front before joining.”

London Money director Martin Stewart thinks a failure to read contracts properly is an Achilles heel for many brokers.

He says: “I’m amazed at how few ARs do read the contracts.”

But he adds that many AR brokers think networks, in their initial sales pitch, overplay the benefits of joining and then do not explain the reality of leaving.

He says: “They throw petals down the path to get you to join and then, when you’re out the back door, it’s landmines all the way to the gate.”

All networks that responded to Mortgage Strategy said their sales pitches were realistic. Intrinsic, Online Partnership and Personal Touch had not responded by the time of publication.


Most ARs have commission income
redirected from lenders through their network, which takes a cut of the money before it reaches the broker.

When a broker gives notice to leave, this income is frozen while the network handles the separation process.

However, AR brokers say this process takes around three months on average, which is too long to operate with no income. As such, some feel locked in to networks and unable to leave.



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  • John Scott 14th September 2017 at 12:33 pm

    Networks are always going to say we are the good guys we gave them a contract to read and sign and only an idiot would sign it without reading it which is basically what they are saying here. They don’t really care whether ARs read it or not it will be used against them when the time is right.

    However, during the recruitment process, they are happy to give you proc fee lists, protection commission lists, GI commissions list and absolutely anything that paints them in a good light and it is only after you decide this is the network for me that you then get passed to their admin to complete the process that you will get an email with 10 documents that need to be read, signed and returned. By this point you have already made up your mind so when you come across negative points in the paperwork you are more likely to overlook them.

    Surely these documents ARE the most important and should be presented to ARs upfront before you even think about commission after all they all expect their Ars to go to present products to client and explain both the positives & negatives to the client and only ask them to sign documents when they have a full understanding of what they are signing and agreeing to.

    As far as I am concerned they do not practice what they preach and I think there is word for that!
    There is no network that is telling ARs what their PI excess is, how it works and when it will be applied. It is like drawing teeth getting this information and even in face to face meetings when you ask the question they tell you Oh that’s a really good question no one has ever asked that before I will need to get back to you with that. Jackanory

    Why is there such a fear of being open and honest if there is a PI excess of £5,000 we just need to make a decision on it but surprising you with it when you get your first complaint is unacceptable

  • Peter Turner 13th September 2017 at 10:32 pm

    Your network may want your files back in case they have a complaint but if they then lose it and have to uphold there are no prizes for guessing whose record it goes on to – or who pays the PI excess.

    Make sure your Client Agreement allows you to hang on to copies of client files forever and do hang on to them.

  • Neil Johnston 13th September 2017 at 4:58 pm

    I think the point here is, as stated, the networks are very good at giving you the highlights but not what the divorce will look like if you decide to leave. When I was with my previous network they had actively promoted a move from one month exit notice to three month exit as a positive that if they had to increase fees we always had three months notice their side. I think the advantage was one sided. To state a freeze of income immediately is necessary to validate possible bad advice is nonsense, if the correct checks/measures and span of control means they are happy when you are with them doesn’t diminish the advice when you decide you no longer wish to be. The FCA needs to review this whole position and generate a transparent process for all networks on ALL charges including top slicing, mortgage club shares etc, process for enter and exit so we can make the correct informed choice of who we wish to partner with and it’s about time that the networks look to treat their customers (the AR) fairly as we do with our clients.