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‘Giving ARs carte blanche creates potential for complaints and claims’ – Marketwatch

  • 18/03/2020
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‘Giving ARs carte blanche creates potential for complaints and claims’ – Marketwatch
There are many reasons why a broker firm may choose to be operate through a network, including access to deals and lenders that they otherwise would not have.


However, some networks impose restrictions on the deals firms can complete so being an appointed representative (AR) may end up limiting options as well as open some.

So this week, Mortgage Solutions asked: Are networks right to restrict the deals ARs can do?   


Paul Shearman, proposition director at Openwork  

Ultimately, networks stand behind the advice that their appointed representatives provide. They therefore need to understand and have confidence in the product or service proposition that their advisers offer to clients.   

At Openwork we undertake a comprehensive due diligence process of all providers before they are brought into the proposition.

This will include an assessment of a raft of factors including financial stability, product range, service performance, regulatory controls, complaints processes and so on.  

The results of the due diligence are formally reviewed by our Proposition Steering Group before appointment and key elements of the relationship will be included in a legal contract.  

The product offer and provider performance are then reviewed on a regular basis to determine that the product is being provided to the intended target market and that the overall offering is performing in the intended way.

Failure to deliver this can mean that products or providers are withdrawn from the range available to our advisers. 

As a network we also provide clear guidance to our advisers from a sales process perspective, detailing what solutions are appropriate to different types of client scenario.   

We believe that this approach is essential to ensure we are delivering the very best propositions and outcomes to our clients. Rather than being restrictive, our advisers value the comfort that a network safety net provides. 

Offering complete carte blanche for advisers creates the potential for future complaints and claims if things go wrong. 


James McGregor, director of Mesa Financial Consultants 

Speaking as a firm which came from a network to go directly authorised, the restriction on deals we could do was something we did not agree with.  

However, the way a firm approaches this and feels about it will purely be down to the skillset of the appointed representatives themselves and what their understanding of overall risk is like.  

A lot of the larger corporates need this protection in place as they are not too close to the front end and client facing.

This means it is extremely hard for them to monitor the risk across certain clients, so the appointed representative restricting deals is a way of protecting the business.  

I can completely understand why they do this, but in the same breath I do not agree with them dictating how companies run their business and this is why we went directly authorised. 


Andy Wilson, director of Andy Wilson Financial Services 

I have had almost nine years’ experience with the same network, and only once have I needed to apply to go ‘off panel’ for a mortgage.  

The network has a large and diverse panel of lenders, and it is nearly always straightforward to source the mortgage I am looking for. 

The network advises that I can claim to be a ‘whole of market’ mortgage adviser, because the panel is made up of a large cross section which is representative of the whole market. It does not mean I have access to every lender – in practice no one does.  

However, the panel is sufficiently large and diverse enough to always have a source to go to. Also, it is frequently updated and new lenders are added. 

I can understand networks creating such a panel. They can perform due diligence on a selection of lenders instead of trying to monitor every single one, and their payment services sections can deal with commission payments more easily from a limited number.  

Added to this is the availability of ‘off panel’ requests, where if a strong business case can be made for using a lender who is not currently on the panel, this will be considered fairly, and permission usually given. 

In my experience, clients like their mortgages to be with lenders they have heard of, and who they understand to be regular and solid lenders. The current news often refers to mortgage prisoners, and no one wants to think their lender might end up like Northern Rock.  

They want lenders who are here for the duration, and who they may be able to have a long relationship with, and lesser known lenders can be a turn off. 


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