It may seem a slightly incongruous point to make but turbulence and uncertainty in the mortgage advice market has become something of a constant feature. This is perhaps partially evidenced by the recent figures from the FSA which show the number of firms who primarily give mortgage advice falling over 2011. The number of DA firms fell by 12.4% while AR firms dropped by 8%.
AR firms in particular may feel particularly short-changed over the past few years because of the major upheaval we have seen in the network market. It is perhaps not surprising that we have seen a fall in both network and AR firm numbers over that time and I suspect this move downwards still has some way to go.
Working as we do with many AR firms who are looking for pastures new we have come across a growing degree of scepticism about what they currently get from their network partners and what they are able to find elsewhere by moving. The fact is that, like many UK voters feel about our political parties, AR firm managers and owners appear to have a belief that Networks are ‘all the same’, and often decide that a ‘better the devil you know’ approach is the only safe option.
Much of our work is based on convincing firms this isn’t the case and that the ongoing problems many ARs have with their Networks are not something they have to put up with. Their expectations of Networks can be low and even when they’re not met, they often make the decision to stay put because: a) they believe the Network to be financially sound, or b) the Network has a significant number of ARs and therefore there is ‘safety in numbers, or c) the Networks pay them on time. This appears to be setting the bar low in terms of what a Network should provide.
Unfortunately this tends to be the driving force for their ongoing commitment to the network. Plus of course it is deemed to be an almighty hassle to move networks and they believe they may lose money in the process of moving. Add in a healthy dollop of cynicism when it comes to believing what is on offer at other networks, and a lack of time and resource to investigate the other options, and it is perhaps not surprising that moving Networks is still a relatively rare occurrence.
Clearly, no firm is going to allow a third-party to choose a new network for them but, having spoken to many ARs, what they are often looking for is a resource to dip into regarding other network options; someone who can offer up the alternatives and outline why they might be suitable for that particular business.
Most of all we believe most AR firms want to be treated like an individual business and have a tailored package approach from their network. This is exactly what most Networks don’t want to do – for them it is cheaper in terms of compliance, resource, oversight, provision of opportunities, etc to treat all their AR firms the same and offer a homogenised offering. The problem with this is that you then deliver a service that is not suitable for anyone because ultimately you’re offering the lowest common denominator.
We believe there are few AR firms out there who wouldn’t benefit from, at the very least, being presented with network options which could be far more finely tuned to the individual firm’s needs. The mortgage market, for instance, is a completely different beast to what it was pre-2007 but has the network’s offering changed to reflect that? Yes, a firm should want to sit with a partner that has financial strength and backing but they will also want a comprehensive proposition, a tailored approach focused on long-term growth, a transparent charging and fee structure, full and constant support, access to a variety of opportunities, individual business planning expertise, and so on.
These do not have to be ‘nice to haves’ – they can be achieved. In this market sitting still and simply ‘sucking it up’ does no-one any favours; it is time firms voted with their feet and moved to networks who have the AR firms’ best interests at heart, not their own.
