Just over half of all brokers plan to become directly authorised whereas 45% want to take the appointed representative route, research from The Mortgage Business reveals.
The survey also found three out of 10 brokers are undecided about what kind of panel they would like to operate and of these just over a third will make their decision by December 31 2003 with the same number not making a decision until just before October 2004.
Of those who will become ARs and know what kind of panel they want, six out of 10 said they would operate a whole of market panel of lenders with just one in 10 choosing a multi-tie panel.
Those who would like to be appointed representatives were asked what would influence their decision on choice of principal. Fees, compliance, products and existing tie relationships all emerged as equally important.
Bill Dudgeon, managing director of TMB, says: “Conducting this research has thrown up some interesting results. Compliance appears to be an issue for brokers probably because it can be a time consuming and lengthy process.”
Mortgage brokers seeking appointed representative status have been warned against joining a network before finding out what will happen to their clients if they leave.
Chris Fleetwood, senior partner at Paradigm, says: “Even allowing for the novelty of the situation not one network has yet talked about the mechanism by which ARs can leave. This might be to do with the PI cover that networks will be able to negotiate.”