View more on these topics

Time for an alternative look at Network Data’s proposition

Letter of the week from Michael Ward

Should we all congratulate Richard Griffiths and Network Data on a job well done? Richard, well done (I think), for being the first new mortgage and general insurance network to have made it into the 500-1,000 appointed representative bracket. Your results were presented as if you had won a race. But hang on a minute – has the race finished, are the medals being awarded, is it time for the match tea, or has the race only just begun?

If it were, or is, a race what sort of a race is it? A sprint as you would have us believe or is it more complicated with hurdles ahead? Also, is being the ‘biggest’ right now such a comfortable position; is it going to mean you are the biggest, and dare I say most profitable, in five years?

Is being the biggest what it’s all about – do ARs of the biggest feel more secure or make more money than their colleagues in other networks?

Time for an alternative look at Network Data’s proposition. As I recall, Network Data had its agency with Legal & General closed in August. One trade publication reported that this was because of the low quality of business L&G said that Network Data had been submitting. Of course, Richard rejected L&G’s view of Network Data, preferring his own. So who should we believe? And who on earth would want to deal with L&G?

Well we would for one, along with just about every IFA, multi-tied adviser and majority of tied advisers active in the mortgage and protection markets. It is, without doubt, one of the first names that come to you if you think about term assurance providers.

So what has L&G achieved since it was set up in 1836? Well, it is the third largest quoted life assurer in the FTSE100 index by market capitalisation, the biggest investor in the UK stock market. It has won numerous industry award, including Life Insurer of the Year 2004 at the British Insurance Awards, for the fifth successive year. Finally, according to Swiss Re’s Term Health Watch 2004, Legal & General wrote 394,906 individual term assurance policies in 2003, more than any other firm in the UK.

So when L&G, with all its experience and expertise in life insurance and distribution, decided to stop accepting business from Network Data, L&G must have considered its actions carefully as it has effectively cut off Network Data’s significant volume. This is not something it would have done lightly, in fact most distributors are courted by providers.

Richard, I am sure that your outspoken approach will lead to you becoming rich quickly but, without dwelling on the issue of run-off PI cover, I’m not sure what’s going to happen to your ARs as the regulatory pressures start to bite and the quality of the business being written comes home to roost.

Michael Ward
Managing director
Direct Life & Pension Services


The dawn of a new era for Charcol

Last week saw a curious mix of optimism and disappointment in the mortgage market. The year’s most exciting deal was finally brought to a close with the sale of Charcol by Bradford & Bingley to a team including the brokerage’s charismatic founder John Garfield.Mortgage Strategy was given the first interview with Garfield just hours after […]

GMAC-RFC in 100m portfolio sale to E-Mex

GMAC-RFC has completed its fourth portfolio sale to E-Mex Home Funding, a wholly owned subsidiary of Cheshire. The 100m deal was comprised of a blended pool of mainstream prime, self-certified and buy-to-let products and was completed on the December 3, 2004.Craig Beresford, head of asset sales at GMAC-RFC says: “GMAC-RFC continues to lead the UK […]

BMS calls for more buy-to-let investor choice

BM Solutions is calling for the buy-to-let market to offer better flexibility and choice for investors. The company says it believes that other lenders should follow suit to ensure that all investors have the opportunity to derive the same benefit from their buy-to-let portfolios.John Bianco, senior products manger at BM Solutions, says: “Buy-to-let borrowers are […]

Rents raising at fastest ever rate for three years, says RICS

The Royal Institution of Chartered Surveyors residential lettings survey for three months to the end of October 2004, says rents are rising at their fastest pace for three years.The rent increases are due to rising tenant demand which is outpacing newly available rental properties in the market. 23% more surveyors report a rise than a […]


News and expert analysis straight to your inbox

Sign up