IFA networks Misys Mortgage Services and DBS Mortgage Club could be merged, following the announcement by Misys to float its IFA businesses.
The software supplier is to separate its entire financial service division ‘ including Countrywide, DBS, Financial Options, IFA Network and Kestral ‘ in the next two years, to concentrate on software development. According to Misys, it is likely that its two mortgage networks will soon become one.
Andy Young, head of marketing at Misys Mortgage Services, said: ‘At the moment, DBS Mortgage Club and Misys Mortgage Services are continuing to run as separate businesses, but at some stage in the future this will be reviewed. We are looking into the feasibility of joining the two mortgage networks together ‘ there is a possibility this could happen. If, in the future, these networks do combine, there should be benefits for everyone as it will allow both networks to function their mortgage services on a larger platform.’
Misys Mortgage Services only launched in May this year, but has already reported £300m of mortgage business transacted through its members. According to Young, it is already one of the largest clubs in the UK. If it merges with the more established DBS Mortgage Club, the network can expect to grow even further, which could pose a threat to other mortgage clubs currently operating.
John Cupis of Legal & General’s Mortgage Club, said other IFA networks could be affected if the merger goes ahead.
‘If Misys and DBS join forces, it will bring two already strong brands in the mortgage market together. Both the networks’ strengths are in the IFA market, so we could expect to see an effect on other clubs that concentrate on the same market. L&G’s Mortgage Club is multi-channel, with tied business partners in addition to IFAs, so we personally would not expect to see a negative impact on our member numbers,’ he said.
Nick Baxter, director at Mortgage Promotions, thought a merger made sense: ‘This seems a logical and natural progression for Misys and DBS. Andy Young is so able in his job, it is only right he gets DBS under his wing as well. There is a big market out there. The news does not worry me as Misys and DBS only deal with IFAs, whereas there are still plenty of mortgage brokers out there that we can target with our network.’
As part of Misys’ flotation plan, advisers belonging to both mortgage networks will receive benefits linked to their membership, including participation in the float. A package of incentives is being developed to benefit current and future members in a bid to drive recruitment and reward members’ loyalty. Measures to be introduced also include a practice buy-out plan for advisers when they retire.