Last week, Baker Tilly, Network Data’s administrators revealed it was unlikely that any of the network’s former ARs would receive their outstanding commission, which could total as much as £5m. Ami director Rob Sinclair says: “This should remind brokers to have a good look at the contracts they are committed to and see whether that contract protects them as broking firms. There were some wrinkles in the Network Data contract that have put people at an ongoing disadvantage.”
Sinclair says the issue of missing commission is a constant concern for the trade body. He says: “These are business-to-business transactions that a trade body should not get too close to but we always tell members to never stop doing your due diligence and never stop asking questions.”
He also says networks should be considering ringfencing commission. He says: “It is a model that people may be attracted to.”
Mortgage Intelligence managing director Sally Laker says MI pays procuration fees up front to advisers before the mortgage lender has even transferred the money.
She says: “The AR has to keep asking their network questions about their solvency and if it does not give them the right answers then they should make up their own mind accordingly.”