We’ve seen Legal & General’s decision to eventually evolve away from the network model, the Stonebridge tie-up with Sheppard Group and the emergence of a new distributor last year, The Right Mortgage and Protection Network
Distributors are differentiating themselves in the growing market through strategy and product focus.
Pink’s focus has been quite clearly to switch advisers on to selling protection with every mortgage by suggesting that each broker should take out protection for themselves. This much talked about sales strategy was followed by another controversial move to make brokers who conduct little or no business pay higher charges. Enter the Julian Harris network reminding its members that it values advisers whatever their production levels and will not be raising charges.
Each network offers something a bit different to stand out, a USP, and in some cases a sweetener to lure brokers away from their current home but what if you could have all the headline perks under one roof. This week our exclusive broker panel give us their wish lists for the ideal network to support their business practices.
Dean Mason, Practice Principal at Masons Financial Planning, considers the importance of the network’s public brand identity and the balance of the right fee structure.
Colin Payne, associate director of Chapelgate Private Finance, would like to see a best of the best protection and GI panel and talks about the value of two-way communication with compliance teams.
Colin Chapman, director, Genesis Financial Services, discusses the importance of technological support for intermediaires.
Dean Mason is practice principal at Masons Financial Planning
The ideal network would obviously differ according to how your business works and having worked within three of the five largest networks the difference in focus and attitude can be striking. I say without reservation that the one we are currently part of is a lot closer to perfect than the previous two.
So what am I looking for? You need your network to educate you and pro-active sales training both in the field and remotely is a must. You also would like your network to give you a product edge or added value from providers that your clients can’t get elsewhere. Certainly my network is already striving to achieve these.
The current retention levels and supervisory costs I believe are about right but much higher and the temptation to be directly authorised would rapidly increase.
One area that could improve is the network increasing its public profile in some cases. Clearly if your network is Legal & General or another high street name it adds credibility and stability to your proposal to your clients, if they’ve not heard of the network, it doesn’t really help.
Finally our old friend compliance. Field supervisors, case checkers and such like should come from an IFA or broker background and have at least some client-facing experience, so that they actually have an understanding of the role we play with our clients. It may prevent the ‘them and us’ barrier that can exist between ARs and network compliance.
Colin Payne is associate director of Chapelgate Private Finance
We were once part of the now defunct Network Data so one of our priorities when having to move to a new network is one of financial strength, we certainly didn’t want to find ourselves in a similar position.
As a consequence of this we prefer to be paid commission on a daily basis as opposed to monthly, particularly given the average procuration fee in excess of £1500.00. Given the high value loans and high net worth individuals we assist it is important that we can use lenders that are not on the preferred panel of a network, notably private and international banks.
We wanted to ensure that this process was ‘non invasive’ and straightforward. We equally wanted a ‘go to network’ from a lender’s perspective in terms of offering exclusive/shared exclusive products and although price isn’t the be all and end all there are many occasions where this is the sole priority of the client.
Given the marked changes in the regulatory environment a clear line of communication is key resulting in simple and clear sales processes. It’s important that IT systems are user friendly. This means no duplication of data entry, a system that in itself doesn’t dictate to the adviser the route they have to follow and one which allows the simple production of suitability letters. There must be two way dialogue in relation to compliance, training and competence that’s why we went for a network that would listen to our feedback and consider making changes where appropriate.
In terms of other considerations for the ideal network I’d say, a ‘best of the best’ protection and GI panel, partners for commercial and secured loans, a transparent charging structure and support with marketing, to name a few.
Colin Chapman is director of Genesis Financial Services
There are probably good and bad parts of all the various networks that brokers can be part of in the current climate.
My current network is L&G which has been our home since 1995 and the experience has been a positive one.
During the lean years of 2008 to 2013, when other networks were going bust, we knew that next weeks commission payment was not in jeopardy.
So high on any wish list has to be stable and well funded foundations to make sure that business written is protected and going to get paid. Economies of scale I feel give the larger networks an edge in getting lender exclusives or preferred partner processing.
In the 21st century this probably means No 2 will be technology that is user and compliance friendly. Speaking from experience our current platform, Intelligent Office (IO), is sadly lacking in the first part of its name.
Despite L&G’s shortcomings with IO, where it definitely makes a winning presence is the brand and more specifically the people behind it. It has a strong mortgage and protection presence backed by a known and trusted brand.
The L&G proposition is changing in the coming the months so the theme of this weeks question is quite pertinent and one that I may need to be looking at myself.
So, a well-funded company, that pays regularly, has good technology, offers support and back-up would be high on any brokers wish list.