I am staying with PTFS but it needs to improve its communication skills
As ever with Personal Touch Financial Services it failed on communication and one has to wonder what shape the network will be in 12-18 months down the line.
Last week it revealed that it was hiking its monthly fees for appointed representatives following a radical overhaul of its fee structure.
Under the current structure, IFA firms pay a flat monthly fee of £310 while mortgage, protection, equity release and private medical insurance adviser firms pay £125 a month.
In addition, Personal Touch retains between 10 and 20 per cent of firms’ commission, depending on the type and quantity of business written.
Yes, I will agree costs have risen however with the network having profits of around £1.6m last year.
But did the fees have to rise so steeply with no reduction in the amount that is taken from proc fees?
In terms of communication – we were initially advised that fees would be increasing probably in the Q1 2013 a few months ago and that we would get plenty of notice.
Fast forward to last Friday when we were told that we would be getting a letter over the weekend and a phone call on Monday.
Neither happened and I got the information instead from some forums. This is shocking but not a suprise from PTFS.
It could easily have been handled by PTFS sending an email to all members last week or providing a message on its client and business management system Toolbox that an announcement regarding fees would be available for download from Toolbox at a specific time for everyone.
The letters sent out where all generic other than the addressee.
Which brings us to the notice period which surely should have been three to six months to allow firms to bed in changes to handle the new fees and allow firms to move elsewhere if that is what they want.
However it appears PTFS do not care and are just looking to earn extra money ASAP.
With regards the future, I’m worried what state the network will be in 12-18 months down the line as I can see an exodus of large IFA firms moving probably direct rather than pay £834 per adviser per month.
This will obviously leave the same cost base for the firms remaining and this will either lead to higher costs or redundancies within the network.
It could also impact the remaining IFAs as they are offered less favourable terms by providers due to the reduction in business from PTFS members.
Customers could also lose out from IFAs who have been in the industry for a long time thinking its better just to call it a day and that knowledge will be lost.
Personally speaking I will be remaining with PTFS – however with the increased fees one of which is to cover staff costs its service has to change.
Communication must improve with all the media at their disposal which includes email, Toolbox and even a Twitter account – there is no excuse.
They need to start asking their members what they would like to see changed or implemented rather than the other way around.
Become directly authorised and escape parasites
With regards the news last week that PTFS was increasing its fees, all I can is being directly authorised is the way forward.
I have been at three networks, all basically taking money in the name of what? Poor service levels and an our-way-or-the-highway attitude.
Looking at the compliance structures that are in place in all networks, they just push the work back to the firms, with over priced conveyor belt style selling all owned by the same life insurance firms, all offering the same propositions.
Ultimately you pay to keep a BDM in a BMW who emails you three times a week.
But when I say go DA I mean go fully DA – exclude any so called self styled DA alternatives – use fully external compliance consultants.Why use mortgage clubs? Do you actually get better proc fees? No, the network does and you don’t see the real fee paid anyway.
Its time to change – I think of networks as parasites, that cling to firms pushing conveyor belt products.
We need choice and real individual firms going forward or the risk is that the network offering is no different to a bank.
As an appointed representative you’re basically a franchise and the company you’re part of earn off the back of you.
Don’t think for one minute that when the obvious hits the fan the network will back you up either.
If you have survived in the mortgage industry to date, then you all have something about you to deal with compliance.
The networks I’ve been part of made me feel I was on my own anyway.
And anyway, looking at some of the incompetence in back offices and compliance in general – and that applies to banks, networks and the FSA – it’s not rocket science.
Because if it was, none of us would function. I think networks have been guilty of scaremongering in the past and advisors have fallen for it.
Caution needed over Vince Cable lending initiative
The business secretary Vince Cable has announced plans for a new lending initiative, whereby the government puts £1bn into setting up a bank designed to increase the amount of lending to businesses.
Cable last week told the Liberal Democrat conference this will help many small and medium-sized companies who have struggled for credit since the financial crisis.
He promised to fight short-termism and “get behind” good firms.
Sounds promising, until you look at the small print and I have a few comments to err on the side of caution:
1)It is suggested that it will take another 18 months or so for the scheme to go live.
That is clearly too long. If you can wait that long for funding, then you may be okay, otherwise this new scheme will not matter because your business may not be around.
2)The definition of small business is again unclear – is it aimed at businesses wanting to borrow £100,000 or £200,000, in other words a really small business, or is it aimed at small companies like previous schemes i.e. with turnover of £1m plus, in other words a small company? Remember both are classified as SME but they have totally different requirements. It looks like this new scheme will benefit the latter, whereas it is the former who really need it.
So please excuse the scepticism but my conclusion is that this is just another idea destined for the bin?
Let me remind you of project Merlin, The Enterprise Guarantee Scheme and the previous flagship Funding for Lending Scheme. The latter scheme came under scrutiny with some banks admitted that they didn’t even entertain the idea of getting involved.
The real problem is unrealistic expectations by many businesses – some still want to borrow on terms which were offered in 2007 – with unrealistic conditions set by lenders.
The facts are also different: business finance is available and our experience proves that sensible finance for sensible proposals can be organised, but it cannot be done like in 2007.
Secondly the numbers are also down because many successful businesses are actually reducing their borrowings to reduce their dependence from banks – with all the doom and gloom stories who can blame them.
Complaint fee would stop most of the chancers
Data published by the FSA showed an 80 per cent spike in complaints for mortgage business, rising from 52,722 in the second half of 2011 to 95,363 complaints in the first half of 2012.
Association of Mortgage Intermediaries chief executive Robert Sinclair argued that the rise was down to on-going problems with the time taken to process applications and complete deals – and basic administration errors increasing. Secondly, complaints as lenders will not lend in the same way they did in the past.
And thirdly he stated: “Some claims managers chancing their arm to test the water to see if there is any scope. But on that, feedback to date from our members is that brokers are winning when these are presented to the Financial Ombudsman Service.”
As another comment on Mortgage Strategy Online put it, while we might be winning against the CMCs that are ‘chancing their arm’ and still go to FOS even after their complaint has been shown to be a pack of lies, we are still paying £500 each time for these fraudulent claims.
If a customer has a genuine complaint they should be prepared to pay a nominal fee of say £95, which would be refunded if the complaint is upheld, that would instantly stop the majority of these spurious complaints.
The problem is the FSA and the FOS would see a big fall in their workload and that would put the UK at risk of loosing is title as the compensation capital of the world, therby putting their jobs at risk.
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Why should the wealthy OAPs lose their bus pass?
The Liberal Democrats at their annual conference last week revealed that the party is considering curbing age-related universal benefits for pensioners with assets of more than £1m.
Liberal Democrat leader and deputy prime minister Nick Clegg said the welfare budget “cannot remain immune” from Government cuts after the general election in 2015.
I totally agree that the welfare budget cannot remain immune but they are going after the wrong people.
Pensioners with wealth have almost certainly worked hard all of their lives to accumulate the wealth which means having paid taxes as a result.
The work shy and general scroungers pay nothing into the system, bleed it for every penny possible and get all add ons possible. Why should a pensioner lose their bus pass just because they can afford to pay for the fare?
This country has gone mad. Hard working savers being penalised in order to keep the Jeremy Kyle generation on their sofas with their paid for houses, paid for council tax and no worries about being made redundant.
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