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Mortgage merger poses difficult questions for Mr Choice

No decision has been taken on how the combined salesforce of Bradford &

Bingley IFA and mortgage specialist John Charcol will operate, according to

Charcol&#39s new commercial director, Ian Darby.

Having been selected for the post above axed Charcol chief executive Keith

Scott, Darby says details on how the branding, administration and pay

structures of the 650-strong salesforce will operate are still unknown at

this stage.

The mortgage advisers are set to work as one distribution group, with the

£100m acquisition of Charcol forming part of B&B&#39s strategy to get

consumers to associate its brand with independent advice.

Darby has been dubbed “Mr Choice”, having been given the power to select

the mortgage products that the advisers will sell. However, he says some of

the biggest decisions are yet to be made.

While Charcol is strongly in favour of the benefits of packaging, B&B does

not package mortgages.

Reconciling this issue is one of the biggest challenges of Darby&#39s new

role. He says: “It is a really important issue because we have always seen

packaging as key but we are jumping into a much bigger environment with

B&B.” The administrative operation of the combined salesforce is another

challenge fac- ing Darby.

The salesforce will consist of 150 John Charcol advisers and 500 B&B

brokers. The B&B brokers consist of purely mortgage IFAs plus “wealth” IFAs

who deal in life and pension products.

Charcol cannot confirm whether the administration of the merged

distribution group will run on the John Charcol model, the B&B

infrastructure or if admin will be outsourced0 to a third party. But Darby

is hinting strongly that the Charcol business model will be used as a

template for B&B&#39s advisers.

He says: “We were clearly purchased for our brand and people skills plus

our business model, which will roll into different parts of the business.”

Darby must also help to decide how to pay the integrated distribution

group, as total salaries are worked out on a different basis for Charcol

advisers and B&B brokers.

Charcol advisers name their salary on condition that they write an agreed

amount of mortgage business whereas B&B brokers have a basic salary and a

set bonus target.

Darby says: “It is an incredibly sensitive issue.”

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