There has been a flurry of activity ahead of general insurance regulation as product providers and networks trip over themselves to offer their services as principals to mortgage brokers, IFAs and protection intermediaries.
Mortgage brokers have been presented with both ends of the stick in that if they intend to carry out protection insurance-related advice and sales they must comply not only for mortgage but also for protection regulation. If the average mortgage broker eschewed offering protection advice completely ahead of regulation one could hardly blame them. But as has been argued many times in this column, losing the opportunity to offer a comprehensive advice package and glean an additional income stream are high prices to pay for not taking the extra step to comply for non-investment insurance business. Andy Cowell, head of sales at The Source, highlights the frustration of dealing with many networks for protection business. On the service front he argues that while for mortgage lending there are applications in principle, electronic submission via the Mortgage Trading Exchange, case tracking etc, all designed to help applications to offer and completion, on the protection side there are no improvements being offered on what is acknowledged to be a frustrating process for brokers aiming to get clients on risk. It was to be expected that mortgage regulation would dominate the thoughts of the networks, but it's now time they considered offering support where ARs' protection needs are concerned.
Networks should be offering mortgage brokers, especially smaller practitioners, a truly independent option in the depolarised world, not tied to any provider and with the whole market – or as many as appear on the product panel – to advise on.
Many networks operate to provide this very service and accept that many brokers will be joining them to avoid what they see as the uncertainty of direct regulation. These networks also accept that many members, once they have seen how direct authorisation works, will be confident to take that route themselves at a later date.
What we should not accept from networks is the 'pile 'em high and take the commission cut' approach to members and providers on panel. Mortgage brokers, whether they are immersed in protection business already or are considering building on what they do now, need a committed approach from their network to negotiated deals, efficient application systems and compliance they can trust.
If they are going to take protection seriously they need their principals to do the same.
Your protection related question
Q: How supportive are networks where protection is concerned?
Richard Verdin is sales and marketing director of Enable
Support comes in many guises but first networks must get to grips with the needs of the busy compliant mortgage and protection adviser. However, it is clear that a number of the new mortgage networks don't understand protection propositions. This is highlighted in part by their lack of investment in robust IT solutions linking mortgage and protection advice audit trails, and in part by the number of first division providers missing from certain networks' panels.
Mark Mountney is managing director of Premier Mortgage Management
Most have fairly broad panels and attractive commission rates for protection products so I see them as much of a muchness. However, there is a noticeable difference between IFA networks and the newer mortgage networks in that the latter appear not to be offering such depth of coverage as the former. Perhaps time will see the gap diminish, especially if they are not achieving the penetration they desire. A wider offering will achieve that.
David Quick is managing director of Ceta
Not all networks are the same. Some offer little in the way of support – only agency facilities and commission payments. I have read recently in the press that a number of this type of networks, with little or no substance to them, have already gone bust. You must make sure that the network you deal with gives added value regarding training, software and compliance support.
Andrew Cowell is head of sales at The Source
Assessing how supportive networks are where protection is concerned is notoriously difficult as each potential intermediary AR will have different protection needs and concerns. However, while networks in general appear to have been fairly successful in obtaining good commission rates from the protection providers for their ARs, in both the product and service areas the verdict has to be: 'could do better'. Let us consider product choice. It appears that any network you care to name has a lender panel numbering 40-plus suppliers (and has spent many column inches advising us that their panel represents whole of market). But how many networks have only two or three suppliers for protection (covering not just life but also ASU, income protection and B&C)? Not many networks claiming their panels offer fair analysis then.
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