Have you noticed the number of so called experts appearing in the mortgage trade press predicting the end is nigh for networks over recent weeks?Although I agree there will be more consolidation within the sector and that smaller networks may be finding it difficult to survive, I sense that some of these pundits have their own agendas. The experts are frequently promoters of their own networks and it could be cynically suggested that they are drumming up business for their own firms by predicting doom for competitor networks. Since Mortgage Day, we have a much clearer picture of what the networks stand for and the different models they have adopted. Therefore, making an educated guess about which organisations will prosper and which will get swallowed up is much easier than it was a year or so ago. Brokers whose primary focus is life business will look for networks that satisfy that need first and mortgages will be a secondary consideration for them. Brokers who are more general insurance orientated may look for a network that has grown out of an insurance aggregator. IFAs whose primary business is investments and pensions would look more to the IFA networks, as mortgages are not their key focus. Of course, some networks will attempt to be jacks of all trades and run the risk of not fully satisfying any of their members. But nowadays it is more straightforward to identify exactly what strengths each network can offer intermediaries. Prior to regulation, mortgage brokers were looking at all the networks as they were unsure which would be the best fit for their business and needless to say some got it right and some did not. But what is clear is that if mortgages are your primary business driver and passion, you should be looking at a network witha focus on mortgages that gives you an edge in the marketplace but also offers additional insurances. Fortunately, the mix of brokers is such that all of these network models have a place in the market. So 18 months on from regulation the most interesting question is whether brokers who originally chose the directly authorised route are deciding to switch to becoming appointed representatives, or vice versa. I think many DA brokers underestimated the true cost of compliance and are now looking at the alternatives, of which there are a number. As the market evolves and settles down after the upheaval of regulation and brokers become more aware of the alternatives on offer – outsourced compliance services vs internal compliance, AR vs DA routes – it’s easier to find the best fit for your business. It could be that there is a boost in demand for AR status if the propositions that evolve in the future are sufficiently attractive. But be wary about the one-sided propaganda being peddled by some networks about the future of the sector, and their pronouncements on who will be the winners and losers.
- Top trends
Leeds has launched a 10-year fixed rate mortgage at 4.99%.
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After lenders’ exit fees getting a bashing in the media over the past couple of years, the Financial Services Authority has finally decided to give its input. But is it too little, too late?
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The era of loose monetary policy created an environment that rewarded passive investors in the US. However, with the US raising interest rates for the first time since 2006, Felix Wintle explains why he believes active investing will be more important than ever. In the video Felix discusses: The rising cost of capital and its […]
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