Simon Broadley appointed MD of Tenet’s adviser business
Tenet&You, the Tenet Group’s adviser business, said the appointments would help drive further growth.
Tenet&You, which was rebranded from Aspire in 2020, has acquired 18 firms.
Broadley joined Tenet in 2018 and was managing director of Tenet Lime when it merged with Tenet Connect and renamed Tenet Network Services in 2020; at the time of the merger his job was thought to be under consultation.
Broadley, who will continue as managing director of Tenet Mortgage Solutions the group’s owned mortgage and protection business, is also deputy chairman of the Association of Mortgage Intermediaries (AMI).
Harris has over 20 years of financial services experience, including partnerships and wealth management consultancy.
Broadley (pictured) said: “Tenet&You’s growth shows that consumers want quality support that adapts alongside them, which is exactly what we do. I’m delighted to be leading an already strong team in this exciting next stage and continuing to ensure consumers get the very best services and options.”
Mark Scanlon, chief executive at Tenet, said: “It’s an exciting time for our owned advice business. Tenet&You provides a ready-made exit for retiring advisers that also ensures their clients continue to be well looked after. Simon and Dave’s expertise and understanding of the advice sector will be invaluable as we take Tenet&You to new heights and deliver that all-important financial peace of mind to consumers.”
Tenet finance boss Keely departs mortgage firm
She is being replaced by Martin Tyler as chief finance officer subject to the regulator’s approval. He will work with Craig during a three-month hand over.
Tyler has more than 15 years’ experience in financial services and joins from insurers the Gelert Group where he still has several active directorships.
Craig is moving to her husband’s home country of New Zealand with her family.
On his appointment, Tyler said: “This is an exciting period for Tenet Group.”
“Adverse financial performance”
The reshuffle at the top of the finance division follows the posting of Tenet Group’s loss before tax of £4.08m for the year ended 30 September 2020 on Companies House. This compared to profit before tax of £3.5m in the previous finance year.
Exceptional costs reported by the group included £689,000 in redundancy costs and several impairment charges.
In the firm’s latest accounts, of which the last six months fell during the first phase of the pandemic, none of Tenet Group’s businesses posted a profit.
Tenet Network Services, which replaced the Lime and Connect network brands, posted a loss of £1.47m compared to a profit of £811,000 the year before. Aspire and subsidiaries, now Tenet & You the firm’s own adviser arm, reported losses of £1.014m compared to a profit of £1.76m in the previous financial year.
The group said its revised forecasts of the anticipated affects of Covid-19 on its revenues were accurate, noting that reductions in wealth and mortgage adviser income had fallen between 25 per cent to 30 per cent in the last six months to 30 September. Financial and mortgage adviser revenue fell by £13.7m to £158.7m.
Tenet said despite its “adverse financial performance”, the company remains finically resilient and stable with strong liquidity and capital.
Non-executive director Caroline Dibbs has also left the business.
Tenet unveils further tech drive with improved broker training programme
Under the leadership of Helen Ball, managing director of the network, Tenet’s main focus for 2021 is to increase the technological support available to brokers and ramp up the training on how to use it.
Since the Intelligent Office (IO) mandatory CRM system was introduced in September 2019, Tenet says it is “pleased” with the progress it has made improving the system since its launch, and has rolled out another IO upgrade this year.
Speaking to Mortgage Solutions about Tenet’s tech plans for 2021, director of strategic development Ben Wright (pictured) said: “Technological change is often unsettling but we’re now seeing excellent levels of customer usage with the IO system.
“Over a third of our members are making use of value-added components such as the personal finance portal to communicate securely with their clients, and others using integrations with sourcing systems and call recording capabilities within IO.”
Tenet says brokers can expect to receive more training on new technology roll outs than they did when IO was launched. Tenet was criticised by its members for giving four months notice that a new CRM system was being embedded into the network.
Advisers also reported facing no professional indemnity cover if they did not use the system in full.
“We had to take a big bang approach when we switched over to Intelligent Office,” said Wright.
“This was definitely not our preferred way of operating. Our exit from the contract with our previous supplier meant we had to do it in that way.
“I think looking back we underestimated the level of training required, however, we have been investing considerable resource into training since this point, and continue to do so.”
He added: “We need to help our brokers use technology to enable efficiencies within their businesses.
“That will certainly be a theme for this year; more training, more guidance, more help in using our systems so advisers can gain efficiencies within their practices.”
IO is only one part of Tenet’s tech programme. The network has been working with a new software system called Zoho to deliver a CPD recording app.
The software is integrated into its events programme so when an adviser has attended a session the points will automatically be recorded for them.
Along side the app, Tenet says it has streamlined its file checking process and is currently building a dashboard that will display a firm’s key performance indicators to make compliance easier for firm principles.
New role for Broadley
Tenet Network Services replaced the Lime and Connect network brands in October last year bringing them under the sole leadership of Ball, who also sits on the board as group operations director.
Former Tenet Lime MD Simon Broadley, whose role Mortgage Solutions reported was under consultation in October, was moved from the network to manage one of Tenet’s own mortgage advice firms, Tenet Mortgage Solutions, the result of the acquisition of Police Mutual’s advice arm.
Broadley is in charge of 45 brokers within the firm which sits within Tenet’s own advice division called Tenet & You.
The group is investigating whether it is possible to carry out other similar acquisitions that will fall under the Tenet & You banner.
The rapid introduction of IO caused some firms to quit the network. Mortgage Solutions has spoken to brokers who have left, who say they have waited more than six months for novation to complete.
Novation is the process that begins when a broker serves notice to leave a network, and involves releasing earnings generated by the broker while working at the network.
Wright says where contractual obligations have been met, the novation process should complete within three to six months of the agreements being signed.
He added: “We’re always disappointed to lose any member. However, the actual number of departures in 2019/20 was not unexpected and broadly in line with our normal turnover.”
Tenet says its internal broker growth was strong last year and continues to support its member firms to increase their adviser numbers.
Simon Broadley’s Tenet Lime MD job under consultation
Broadley (pictured) has been managing director of Tenet Lime for two years and nine months, according to his LinkedIn profile.
Tenet Group announced it was merging the Lime and Connect brands in July. Tenet Connect is the group’s financial advice arm. The two brands will be rolled together and renamed as Tenet Network Services. The merge will go ahead on 1 October.
Tenet said new roles would be created by the merger, but redundancies are expected and a consultation, which Broadley’s role is believed to be part of, is already underway.
Since installing a new CRM system, Intelligent Office, that went live in September last year, many firms have expressed their frustration over issues with the technology.
Mortgage Solutions reported how 35 adviser firms had written to Tenet before IO’s launch to ask for a gradual introduction of the system which they said was “underdeveloped” and described as “operationally and financially damaging”. Tenet went ahead with its timeline as planned.
Tenet declined to comment.
TenetLime head of broker recruitment quits – exclusive
Barnes was responsible for recruiting new broker firms to the mortgage network and helping existing members to grow their own business by hiring new advisers.
He joined Tenet in 2013 and worked as a regional business manager for the network before being given the recruitment position in January 2018 .
In October, TenetLine’s general manager Richard Conway resigned from the company.
The network upset scores of mortgage advisers by introducing a mandatory IT system, Intelligent Office, in September after giving them four months notice. Brokers said the network had not left enough time to test the system or given them sufficient notice to plan for the change.
Mortgage Solutions saw a letter dated 26 June, sent to the board of Tenet signed by 35 adviser firms asking for a more gradual introduction of the “underdeveloped” Intelligent Office system. In the letter, advisers said the introduction of IO was “ill-planned”, “operationally and financially damaging”, and an “increased financial burden”.
Four broker firms that had handed in their resignation from the network, who spoke to Mortgage Solutions anonymously, were facing a combined bill of £140,000 to leave.
A spokesperson for Tenet said: “We can confirm that Lee Barnes has left the business and we wish him well in his future career. We expect to be able to announce his replacement shortly.”
Barnes could not be reached for comment.
Tenet brokers paying tens of thousands to leave network over Intelligent Office row – exclusive
The heads of the four firms have all served notice to quit Tenet after the network introduced a new mandatory IT system, Intelligent Office (IO), in September without giving them sufficient time to prepare for the change.
Three of the firms are facing bills of more than £40,000 each.
Mortgage Solutions has also seen a letter, dated 26 June, sent to the board of Tenet signed by 35 adviser firms asking for a more gradual introduction of the “underdeveloped” Intelligent Office system. In the letter, advisers say the introduction of IO is “ill-planned”, “operationally and financially damaging”, and an “increased financial burden”.
Mortgage Solutions spoke to four firms who have handed in their notice because of the introduction of IO. They asked for anonymity because they feared Tenet would terminate their authorisations before they had made alternative plans for their businesses. A termination acts as a black mark on a broker’s compliance record.
Less than four months to prepare
The rapid introduction of a new IT system Intelligent Office, that went live on 25 September, is behind the turmoil at the network.
Before Intelligent Office was brought in, brokers could use their own customer relationship management (CRM) systems, which many Tenet Lime members say was the network’s unique selling point.
However, in February this year Tenet Lime announced it had signed a five-year contract to use Intelliflo’s Intelligent Office system. Brokers say they were not told the system was compulsory until 31 May giving them just under four months to prepare their businesses for the change.
One sole trader, who resigned in June, said: “When I heard about the new IT in March we assumed it was just for registering the new business we had written so we could get paid. When brokers asked a Tenet representative at an event in Bristol if it was compulsory, they were told no. Not long after, that no became a yes.”
Another mortgage director said the communication that the system was mandatory was “hidden in a note” sent to members.
The director, who has just paid Tenet more than £40,000 to leave the network, said: “It is the single most catastrophic debacle that I have come across in the ten years I have been a member at Tenet.
“We joined Tenet because we could use our own CRM system and it has always worked well for us. When I heard they were making IO mandatory I told them I will not be adopting it. It has not been piloted. You do not roll out a system without 12 months of proper testing. We were given no time to test it, migrate clients or decide if we wanted to leave.
“I have 5,000 clients on my back office system. If I stay I would have to keep my system and pay for IO and then pay someone to double key onto both.”
Extended processing times
When the former chief executive Martin Greenwood announced the contract with Intelliflo, he said it would help advisers become more efficient and their businesses would become more profitable.
Yet the list of complaints about Intelligent Office is long.
Brokers say it now takes twice as long to process a mortgage application as it did before the system launched.
According to users, on the day of launch the client portal that lets borrowers fill in the fact find and upload identification was not live. Sourcing systems were not integrated with Intelligent Office and information was not being pulled through to the suitability letter.
“We asked Tenet to postpone the installation and to pilot it first, but they refused,” said another director also facing a bill of around £40,000 to leave the network.
“If we carried on like this the business could be at risk within three to six months. We can’t carry out the same level of work because of the extra time it takes to complete one application. We have staff going off sick with stress, because they have to do extra hours and my part-time staff are working full-time shifts.”
The director who has to pay the largest bill, which he said is excess of £50,000, called the launch of Intelligent Office a “disaster”. He said: “I don’t want to go but they have forced me out with this silly system. I will have to pay the bill.”
He plans to join the Primis network where he will be able to plug in his own CRM system into Primis’ software, Toolbox.
In the latest video update to members on 23 October, seen by Mortgage Solutions, Tenet chief executive Mark Scanlon admitted that since the system went live there have been more than 50 changes to the Intelligent Office system based on users’ feedback. He added “there’s a list of far more to go”.
Handed the bill
After first being advised they had to serve a three-month notice period, the firms were then told it was in fact 12 months because they had taken funding from the network which altered the original terms of their contracts.
The extension meant they would have to pay a full year’s professional indemnity fees, even if they left one month after the insurance had been renewed.
They must also pay two years’ fees to the Financial Conduct Authority, up to 2021. Firms say they were not charged FCA fees for the first two years of membership at Tenet.
They say being charged two years’ fees on exit is unfair because their turnover, which is used to calculate their FCA bill, is much larger now than when they first joined the network. This means they are subject to a much larger fee.
A system with potential
Not all advisers are unhappy with the switch to IO. Phil Terry, managing director of Square Financial, has been an appointed representative of the network since 2005 and has no plans to leave. He is part of a Tenet network focus group that meets quarterly. He has been feeding back how the system can be improved and working with it to test the changes.
He said: “The system is not ideal but there is a potential there. We are only using ten per cent of its capacity at the moment. It will take time before they can make all the changes and configurations, but they are listening and trying their best.
“Tenet is working hard behind the scenes which perhaps brokers don’t realise, and they can only communicate the changes once they have been implemented.”
A spokesperson from Tenet said: “We have more than a thousand users now operating our instance of Intelligent Office on a daily basis and Intelliflo has a further 24,000-plus users using the software.
“We designed our best practice advice journey in partnership with a number of working groups of members and this has been rolled out to our wider adviser population through a variety of training and communications.
“The client portal is an optional feature for firms and can only be set up once the system is live. It is being rolled out to all members who have registered their interest.
“The Twenty7Tec integration will go live as soon as Intelliflo releases it.
“Our professional indemnity insurance, including our unique lifetime run-off cover, operates in line with any annual contract.
“We can’t comment on individual contract notice terms however.”
Richard Conway quits TenetLime ‒ exclusive
Conway (pictured) had been in the role for one year. Before that he worked for Yorkshire Building Society for 18 years, according to his LinkedIn profile.
He held several positions at the society, including eight years as product manager for savings and five years as a resource planning analyst.
Tenet has been under fire from mortgage brokers for the enforced introduction of the Intelliflo software to its appointed representative firms.
Tenet Group would not comment on Conway’s reason for leaving his role or where he was moving to.
Sesame places ring of conditions around retirement interest-only advice sales
Sesame will require advisers without the lifetime mortgage qualification to contact its helpdesk before completing a retirement interest-only (RIO) mortgage to a customer aged 70 or older.
ARs with the lifetime mortgage accreditation can complete all applications by customers whatever the age.
All advisers will be allowed to complete retirement interest-only mortgages for customers under 70-years-old.
The network told Mortgage Solutions it had been discussing the situation with lenders as they enter the market to ensure consumers were receiving appropriate advice and that brokers were protected.
Sesame head of compliance Carl Wallis said: “The risks of RIOs are similar to those of lifetime mortgages in that releasing the lump sum could have an impact on the customer’s state benefit and tax position, so because the risks are similar we need to put safeguards in place.
“If it’s clear to us that a lifetime mortgage is unlikely to be suitable or RIO is likely to be more suitable we still allow the advice to continue – for example where the customer is just looking to flip the current interest-only into a RIO and not raise any capital.
“That’s the only restriction we have in place and we have processes where advisers can still give advice if it’s likely to be suitable, so I don’t think we overly restrict them,” he added.
Responsibility for consumers and advisers
The network is also considering how best to support brokers when dealing with enquiries from older customers where their tax or state benefits situation may be affected.
“We think the processes need to be better for the customer than the Financial Conduct Authority (FCA) is currently suggesting, so we are currently looking at processes to resolve those issues,” Wallis said.
“We’re looking at where systems can help advisers do that and also developing a later life hub on our website which will ask advisers who want to become active in that area to go on and do those courses.
“Our stance is developing with the market and we don’t think its overly restrictive, but we do have a responsibility to make sure it’s working better for consumers and that advisers are protecting themselves and they understand the risks.
“Day-to-day I don’t think most mortgage advisers are used to releasing a lump sum for anything than buying a property, so it is different,” he added.
No significant risk
Other networks contacted by Mortgage Solutions said they were aware of the concerns and had made advisers aware of the situation, but did not believe there was a significant risk at present.
Intrinsic mortgage and protection network managing director Gemma Harle said the firm is not restricting its ARs, but agreed that the industry should be looking at the product differently to a usual mortgage.
However, she believes there is no need to be concerned about the emerging product as it includes the usual affordability checks, documentation and fact finds to keep the customer informed.
“We’re not looking to licence our ARs, but we’re different as a high number of our mortgage advisers are financial planners too, so we see this as an additional product to the financial planning space,” she said.
“I don’t think its necessarily at the point of sale that the challenge will be, it will be as the customer gets older and the risk of the customer becoming vulnerable while they still have a mortgage is higher.
“So because financial planners do annual reviews they are closer to the customer and much more equipped to do that,” she added.
Equity release reminder
A Tenet spokesperson said the network had updated its policy to recognise the RIO mortgage and highlighted some of the potential areas where there could be risk, such as remembering to flag that an equity release product may be more appropriate.
“We will keep the matter under review and act if we identify emerging issues but for now, having set our policy in accordance with the rules, we do not anticipate problems where advisers act in the best interests of their clients,” they added.
L&C Mortgages associate director, communications David Hollingworth said the broker had taken similar measures to ensure that customers understood that lifetime mortgages may be an option.
“Where customers do want to explore the options in the traditional equity release market we are able to refer to a specialist in that area,” he said.
“We also require advisers to make it clear to those looking to borrow additional funds to make sure that they take appropriate advice on the potential impact from a tax and benefits position.
“This sits alongside our policy to help identify vulnerable clients, which is designed to ensure that those customers can be dealt with in an appropriate fashion. Clearly not all older borrowers will be vulnerable but this helps to flag where there may be a need to take a particular approach in how we deal with those customers,” he added.
How to spot fraudulent income on mortgage applications – Broadley
As technology improves, unfortunately so do the fraudsters.
It is easier than ever before to fake documents, with an increasing number of websites that allow you to produce payslips, P60s or even amend and edit bank statements.
In these situations, it can be very difficult for an adviser to spot the difference between a real or a fake payslip and the application can be submitted with the adviser being none the wiser, but end up being flagged by the lender’s fraud team.
The biggest type of fraud in this area is around staged income.
This is where applicants with low or no income may create income streams for the purpose of obtaining a mortgage.
The income is manufactured to look like regular payments throughout the mortgage application process but it then ceases after completion.
As an industry, we are working together to combat all types of fraudulent activity, but everyone can play their own part in helping to thwart the fraudsters, so here are a few potential red flags on the income-related front:
- Applicant is only employed for a short time prior to the mortgage application – typically six months or less;
- Salary credits paid by “Faster Payment” as opposed to BACS;
- Change in job type that appears out-of-line with previous roles;
- A very recent second job, whereby the income is needed to support the mortgage amount;
- Bank statements that show a sudden or significant increase in income prior to the mortgage application;
- Employer is small, difficult to trace or a family member.
Of course there will be genuine customers who fall into these categories but there are a few quick extra checks advisers can do themselves if they have concerns.
Google the company – does it actually exist and does the street view reflect what you would expect to see? Run a Companies House check – has the business been trading as long as the client has been working there?
Are there any benefit payments on the bank statements that you would not expect to see at a certain level of earnings? Or similarly, student loan credits for an employed person.
Go back to basics – does the year-to-date figure on March’s payslip match the P60? Are the salary credits coming in on working days, not Sundays or Bank Holidays? Are there the relevant deductions you would expect to see on a wage slip for a high earner?
There is no exact science to this and most of the time your customer will be genuine.
However, if something does not feel right it’s worth advisers making these extra checks to protect themselves and their business.
Tenet appoints McDonald as recruitment boss
McDonald was previously with Intrinsic for three years as relationship manager, following 10 years at Sesame as regional development director.
In his new role, McDonald will lead recruitment activities for TenetConnect as well as responsibility for the smooth transition of new members during the onboarding process.
Tenet’s adviser propositions director, Simon Broadley, (pictured) said: “I’m delighted to welcome Iain as part of my leadership team. He has a great understanding of what advisers need and want from a network, which will support us in our ambition to grow by offering the most attractive proposition available to advisers.”
McDonald said: “I was impressed with Tenet’s objective to be the best in the market, without compromising the principles and core values which have served it so well over the years. I’m looking forward to being part of its ongoing growth and ensuring that advisers are part of a smooth, joined up process from the moment they join TenetConnect.”