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Networks not brokers should pay for service improvements – poll

  • 15/01/2016
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Networks not brokers should pay for service improvements – poll
Almost three-quarters of Mortgage Solutions readers believe networks should pay for their own improvements, with just 3% saying advisers should front the cost.

According to the poll carried out by Mortgage Solutions of 194 respondents, 24% agreed that investment in a network’s infrastructure or services should be shared by both parties.

Just this week, TenetLime posted a 48% increase in turnover in the 12 months to 30 September 2015, while earnings jumped by 105% during the same period. As a result of its robust financial results, the group announced it would invest heavily in its proposition and systems, with £1.7m set aside for fixed assets.

TenetLime managing director Gemma Harle said it was important to ensure that if networks do charge their brokers for investment, that advisers are able to reap the immediate benefits.

“I don’t think you can force all advisers to pay for a network improvement because not everyone will necessarily benefit,” she said.

“At the same time, our investment into the business is a result of profits we’ve made from appointed representatives. The charges that networks make tend to be as a result of the proc fees paid by lenders, so a direct charge is quite hard to justify.”

Colin Payne, associate director of Chapelgate Private Finance, said in reality the majority of brokers would be happy to pay for network investment that would benefit their business, but pointed out that communication was vital in helping advisers understand this.

“Any improvements that a network is going to make, in the main tends to benefit the broker to a point. The difficulty is where the network takes that money from.

“The problem with taking a cut from the broker fee is that it’s all based on trust as there’s no way of policing the amount that advisers charge their clients. My concern is that while most brokers will probably divulge that information, you’re always going to get a reasonable number that aren’t going to disclose it,” he added.

“We all know the Financial Conduct Authority (FCA) is coming down on networks in terms of ensuring that the correct systems are in place to ensure the right advice is being given should there be any problems in the future. I think if networks were to explain the benefits of an investment to their advisers, then brokers would understand.”

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