Mortgage brokers seeking appointed representative status have been warned against joining a network before first finding out what will happen to their clients if they choose to leave.
Chris Fleetwood, senior partner at Paradigm, says those thinking of joining a network need to be aware that there could be a problem over the ownership of clients in the event of them moving to another network.
He says: “Even allowing for the novelty of the situation, not one network has yet talked about the mechanism by which ARs can leave. The main reason would seem to have a lot to do with the PI cover networks will be able to negotiate.
“PI insurers are not only going to be very proscriptive about the conditions on which they will allow new networks to take on ARs but they are certainly not going to be happy to accept the risk of existing business from an AR from another network, whose compliance regime might not be as stringent.”