Mortgage firms looking for a principal firm should steer clear of IFA organisations, mortgage and general insurance network Network Data has warned.
Speaking at the Money Marketing Live event, Network Data managing director Richard Griffiths issued a stark warning to firms still deliberating over which mortgage network to join.
He thinks firms should be cautious about approaching former IFA networks offering mortgage network propositions. Griffiths believes these types of IFA organisation could be carrying huge liabilities for splits, structured products or endowments.
He urged firms to look very carefully at charges and make sure the operation they are joining can offer them IT support and training.
He also warned brokers to consider whether their PI costs will be included in their monthly fees.
Griffiths said brokers need to make their decision as soon as possible to give their new network enough time to chase the five years-worth of job history references needed for application forms.
He said mortgage firms need to make their choice now or face being unable to trade on November 1.
Griffiths said: “IFA networks like Sesame have for 20 years ignored the mortgage market and now they want to buy you. All the IFA networks have liabilities from pensions, splits and endowments.”