There has been much debate in the trade press over recent months about what intermediaries should be looking for in their ideal network during the build up to FSA regulation.
Some of this is out-andout one-sided propaganda by network representatives with their own agenda while some is actually quite useful. I will try to avoid falling into the former camp by sharing some of my thoughts on the ideal network traits and then highlight how Mortgage Intelligence demonstrates these qualities.
For starters, intermediaries should only be short-listing organisations which are likely to be around for the long term. Easier said than done, perhaps, but there are a few tell-tale signs to look out for.
Setting up a viable long-term regulatory proposition is an expensive and time-consuming commitment and one that should not be taken lightly by those setting up and running the organisation or by brokers when considering which principal to join.
So, look closely at the financial stability of the network and find out who is the financial backer. Mortgage Intelligence is owned by Close Brothers, the UK's biggest independent merchant bank.
This, for example, has allowed us to spend £1.3m developing Fusion, which is the most functional and easy-to-use IT system in the marketplace today. My advice would be to take a long and hard look at what you are actually going to get from a potential network for your money before making a commitment.
Ask searching questions. Assess what clout the network is likely to have with lenders in terms of being able to negotiate exclusives. Look at the size and breadth of its mortgage and insurance panels. Go and visit its offices. Ask to try out its IT system for functionality and ease of use.
The established brands with strong reputations are more likely to survive and be in it for the long term rather than being primarily after the shortto medium-term financial gains associated with selling the network as soon as they have built a membership base.
Mortgage Intelligence has been around since 1996 and completed £7bn of mortgage lending in 2003. Membership has reached more than 7,000 and we employ 70 staff. We currently offer our members over 40 exclusive products from an extensive panel of over 50 lenders.
Network pricing structures vary and can be difficult to compare, which is irritating for intermediaries. While short-term special offers and discounted deals to attract members are fine, the fact that some networks are offering the earth for next to nothing in terms of standard fees also makes me sceptical about their long-term viability.
Mortgage Intelligence was one of the first mortgage networks to detail its plans and costs with regard to forthcoming FSA regulation. We have tried to make our fee structure as simple and attractive as possible to facilitate comparison.
We offer three solutions – Spirit, Vantage and Elan. The Spirit network is for brokers seeking appointed representative status, where we will take full responsibility. Vantage is for those seeking direct authorisation from the FSA but who require additional support services such as compliance and IT. Elan is our fee-free mortgage club offering attractive exclusives.
So, intermediaries must ensure that their chosen network has the necessary infrastructure in place to properly deliver against their promises. Talk is cheap and an established reputation is essential. It is important to choose wisely, as moving from one principal to another will be disruptive and potentially costly during the transitional period.
I believe that we have developed an attractive range of solutions that will ensure our long-term growth and success in what is a challenging marketplace. We have always offered a one-stop shop approach and this is still very much the rationale behind the three network offerings.
Our proposition has focused on the needs of mortgage brokers and the IT has been built accordingly.
It is our intention to work with our network members to ensure that they are able to run their business as they do currently but with the help and additional efficiency of our state of the art fusion system. The service and benefits of a network are of paramount importance and it will remain to be seen who eventually delivers. We intend to be a network that does.
Sally Laker is managing director of Mortgage Intelligence