Mortgage Intelligence managing director Sally Laker has cautioned brokers to be aware of offers of free PI insurance by networks, saying high excesses will still leave brokers out of pocket.
Laker says the small print of some offers states an excess of £10,000 while most PI claims for mortgages are only for around £5,000 to £7,000, which means the offer carries no real value.
She has also urged brokers to look closely at contracts, saying that some networks are tying brokers in for as long as five years, which could leave them committed for too long to a contract that might not be right for them.
After regulation comes in, some brokers might subsequently decide that being directly authorised is a better option. Mortgage Intelligence is currently only committing members for one month up until October, then for three months after regulation.
Laker says it is “absol-utely critical” that brokers look into the financial stability of a company before joining its network.
She urges brokers to look at company accounts before committing themselves because if a network gets into difficulties, there needs to be sufficient fin-ance to continue trading.
The key to choosing the right network is to look at what the broker gets for their money, whether it is a bespoke IT system or compliance online and in person.
Laker says: “I am not sure brokers are asking the right questions. We would be more than happy to give brokers a list of things they need to check before joining a network.”