Optoma Intermediary Partners Network (Optoma InterPartners) will launch at this month’s Mortgage Business Expo, offering appointed representative (AR) status to brokers under Financial Services Authority (FSA) regulation.
The move will expand Optoma’s broker proposition from the mortgage processing and packaging it currently undertakes.
Matthew Bright, managing director of Optoma, said: “Establishing ourselves as a principal firm is the next logical step in the development of our business. We currently have around 1,000 brokers using us each month, many of whom have been asking us what our network solution will be.”
To operate in the network will cost around £30 per prime case and £50 per sub-prime case according to Bright, although these figures will alter depending on volume. Bright said the volume done by an intermediary would also determine the cost he had to pay for sourcing software and professional indemnity insurance (PII). The PII will be provided by Towergate, and each network member will be evaluated on an individual basis. Optoma has also appointed Richard Palmer as compliance director as part of the initiative.
One packager to buck the trend towards offering principal status is The Finance Centre (TFC) which aims to remain solely a packager and offer its services on an outsourcing model to network principals. Wayne Smethurst, senior partner at TFC, said: “We have considered the various strategic options open to us and have decided to focus on what we do best – packaging. We want to work in partnership with lenders and regulated networks to provide a high quality outsourced packaging service and we will continue to support intermediaries who become directly authorised.”
He added: “I have no doubt that some of the new networks will fail because they do not understand the full implications of running a network.”
Stuart Wilson, mortgage development director at Inter Alliance, added his weight to this view and felt few principals would be sanctioned by the FSA until well into the new year.
He said their main considerations should be: “The PII on offer, if the network has a good track record with the FSA, how they will audit and provide compliance support, the product spectrum, the level of procuration fees and the general insurance, life and referral services on offer.”