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Small networks fail on AR aims and look for mergers

Small mortgage networks that have failed to gain enough appointed representatives are already looking at mergers and acquisitions in a bid to stay afloat.

Some networks have failed to gain more than 15 appointed representative members, including Your Mort- gage Options with seven ARs, The Mortgage and Loan Group with nine ARs, The Mortgage Union with 12 ARs and Classic Network Solutions with 15 ARs.

The Mortgage Partnership has six AR firms but says it is confident it will grow this number significantly in the next 12 months. It has already discussed a merger with one other group.

Squirrel Financial Planning has decided to stick to the directly authorised route after considering the network option. It offers a compliance service to a small number of firms and, even though it only has two appointed representatives, is working with 50 brokers.

Both groups believe the New Year will see a number of brokers opt to join networks rather than continue to deal with the FSA on their own and will also see fallout from members unhappy with their network’s service.

The Mortgage Partnership director Andrew Sage says:” I think there are certainly some people running networks who are biting their nails. At the end of the day, those that have based their costings on achieving a certain number of members are going to find it difficult. If the income is not there they will be unable to maintain interest but this will provide a lot of scope for successful businesses.”

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