Packager ICMG is planning to set up a broker network in conjunction with seven or eight other packagers.
ICMG is currently conducting meetings to assess the viability of bringing together a number of packagers into a network format with a central compliance function.
Ray Bohringer, managing partner of ICMG, said: ‘One way forward may well be for packagers to come together in a network. They would all have their distribution channels and brokers may be free to remain as principals in their own right and to use the other packagers in the network. I would expect brokers to use the packagers they currently deal with, but there may be a slight overlap. It will give the network tremendous buying power.
‘We have got to go with one of two routes. We either need to have our own network and link into someone like HomeLoan Partnership, which is setting up a packager principals service, or we need to set up on our own, as a separate company with other smaller packagers. At this stage I would rather be driving something than being driven. It is likely to be the case that we will set up on our own.’
Earlier this year ICMG advised brokers not to join a network and become an Appointed Representative (AR) out of cost and compliance concerns.
Tony Jones, managing director of Pink Home Loans, was positive about the plan. He said: ‘We are keeping our options open. We are exploring the possibility of acting for brokers however they want to do business, but I would be interested to talk more about this proposal.’
However a number of packagers are now in talks with networks, such as Network Data, about taking appointed representative status themselves.
Commenting, Ian Balfour, director of marketing at Solent Mortgage Services, said: ‘Network Data is offering a solution whereby small packagers can become an AR, which would mean they do not have to directly regulated by the FSA.’
However, the bottom line for ARs in this model is that if they want to deal with a lender it must be on Network Data’s panel.
ICMG expects to announce whether it will finalise plans by the end of June.