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When it comes to networks, what size suits you, sir?

Large network

Defined as having thousands of ARs, this select band includes the IFA networks such as Sesame and Tenet, and you should also count in the tied agency salesforces of Legal & General and Zurich. That&#39s a mere four networks in total.

These networks are so large they like to feel their financial future is almost guaranteed – but then you would have said that about Equitable Life. The broker is inevitably a small cog in a big wheel but that may suit the majority of brokers who have no pretensions to be otherwise.

The IFA networks are not particularly experienced in the mortgage and general insurance markets and to a large extent have ignored these previously non-regulated markets. How much real expertise they can develop in these areas remains to be seen.

Medium network

This band, with between 250 and 1,000 ARs, includes most of the other IFA networks, tied agency salesforces of AXA and MGM, and some of the new mortgage networks.

The latter group has a proven record in mortgages while some have also been historically active in the insurance market. They are also free of the burden of the mis-selling scandals in the investment market that have dogged, and will continue to hinder, the IFA networks.

Small network

Defined as having less than 250 ARs, many of the new mortgage networks are likely to fall into this category.

The benefit to an AR is that their business will be important to the network which may already have experience of working with the AR. This brings the advantage that each party knows who they are dealing with. But the downside is that the small networks are likely to be the financially weakest group.

The head of the network may like to think he is your best friend, always available for a round of golf, but if the network disappears down the plughole don&#39t expect him to pay you out of his own pocket.

Any monies owing to you by the failed network are likely either to be withheld by the lenders or insurance companies, or be gobbled up by the fees of the appointed administrator/liquidator of the network.


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