Sesame says that the closures could jeopardise the future livelihoods of small broker firms.
Sesame says it is concerned that brokers are oblivious to the risks they are running as they do not currently conduct ongoing due diligence of networks.
In response Sesame is introducing a range of support measures to help ease the burden for brokers, which includes fast-tracking the application process so that any disruption to affected advisers is minimised.
Stephen Young, sales and marketing director at Sesame, says: “Following the recent demise of Trustguard Credit Services it is clear that some mortgage networks are in real peril, and sadly we expect to see further failures. This is appalling for those hard working advisers who are directly affected, as they will see their commission pipeline frozen and will be unable to trade.
“We are urging advisers to be vigilant and conduct their own due diligence on their network, in order to safeguard their future business. Advisers need to watch out for the warning signs, such as networks getting slower at paying commissions, which could possibly suggest cash flow issues.”
He adds: “This is not just about protecting advisers’ revenue, as there is also a link to clients and Treating Customers Fairly. Should a network be placed into administration, we need to question how effectively the outstanding cases would be processed, which would directly affect clients.”