MGM slashes network by 60 agents

Mortgage Strategy has learned that MGM Assurance, provider of specialist financial services, has dramatically reduced its network by terminating the contacts of an estimated 60 agents.

An industry source says MGM has decided to retain an alleged 20 to 30 of its larger firms that generate a lot of life businesses, but is terminating the contracts of many smaller firms that produce less.

The source says the decision shows MGM is “losing its appetite for mortgage business”.

The firms whose contracts have been terminated have been given 30 days’ notice, and many are angry about the “bizarre” way MGM handled the matter. Some heard they were being given the boot over a week ago through the grapevine, but only received an official telephone call last Wednesday.

One appointed representative, whose contract was terminated in the cull and asked to remain nameless, says: “MGM is swimming against the tide by reducing its network and refusing to look at multi-tie. It just doesn’t seem to want to make the mortgage side of the business work.”

MS has also learned that around half of the firms retained by MGM are rumoured to be thinking of leaving the network, with many considering moving to multi-tie networks where the profit potential is higher.

But MGM says the retained firms are happy with its proposition. Alan O’Nell, head of marketing at MGM, says: “The decision to terminate some agents’ contracts is part of our expansion strategy to increase business volumes by focussing on stronger firms. We are looking to expand our product range and these cuts will free up resources so we can develop our service to remaining agents.”