Director Chris May says it has been near the top of its agenda for more than a year. He says: “Our primary goal was always to become the biggest mortgage network and we have achieved this.
“This idea had been coming for some time that we would eventually cross over to the adviser arena to ensure greater distribution power, not only for the group but also to add an upskilling mechanism to existing appointed representatives.”
Vision will aim at intermediaries who write a lot of mortgage business as well as advising on pension and investment products.
May says the firm has conducted market research on its own ARs and the market in general, which suggests there will bea market for this service.
Vision has already applied to the FSA for its permissions and plans to launch in April. The network has bold growth plans, aiming to increase from its current 700 ARs to more than 2,500 by 2009.
It will have five providers each in the protection, pension and investment areas. May believes optingfor a multi-tie approach will give Vision a sustained future on the basis of the numberof key providers it will have.
“We believe a multi-tie approach is suited to our target audience, not only from a product knowledge background but also to adhere rigidly to the regulatory requirements. Working with a small numberof insurers gives us a greater support framework to offer to our members, for example with training on various products taking place ina targeted manner.”
But Vision’s plans havemet a mixed response inthe mortgage industry.
Prestbury Holdings chief executive Lee Birkett says itis interesting that Vision is moving into this area as Prestbury has just with-drawn from the IFA sectorlast month.
Birkett says: “We deemedit to be too high risk to continue doing this typeof business so it seems interesting for Vision to launch into what is an already challenging market.”
He points out that a network has to have a big percentage of wealth management business to play in that arena. “To be in wealth management, you need to have a publicly backed institution behind you.”
Network Data chief executive Richard Griffiths says: “The life and pension market is a different breedof person. We certainly do not have the skillset in house. We plan to continue to stick to our knitting, it is noton our agenda.”
Griffiths points out thatthe IFA market is a hard market to crack, with several established big players dominating, such as Tenet, Sesame and Burns-Anderson.
He says: “I am not convinced they will be able to attract the calibre of people to join them. To have a mortgage broker dabbling inlife and pensions is absurd.”
But May believes this is the perfect time “to migrate our own vision into the industry”. He says: “Talk of intermediaries diversifying into other markets is rife and,as a major player we need our voice. I think a change is needed in the industry.”
May says the firm’s directors all come from an IFA background. He says: “There is no doubt that adopting this model will not be easy but if we apply the same dedication and knowledge that we have done with our mortgage network model then we will, in the longterm, offer greater valueto our members.”
Pink Home Loans managing director David Copland says the network is making “a bold move” and adds that Pink would not rule out a similar move. He says: “Vision needs to make sure it gets in the experience. It needs to get the right systems, procedures and people who understand that market.It is a higher risk goinginto this market.
Compliance consultant Adam Samuels notes that the compliance risk is greatly increased. “You are looking at a completely different set of systems and rules from being a mortgage network,” he says.
Griffiths says: “Vision will have to work very hard tobe successful and to geta good calibre of peopleto compete with estab-lished players.”
May says Vision’s multi-tie promotion will add to its current sales and marketing activities, including 34 sales and technology forums around the country. It is also running 60 training events across the UK to ensure members are kept up todate and are prepared to sell these products.
He says 10 per cent of Vision’s network have already expressed interest in becoming part of the multi-tie.He says: “The market is not as buoyant at the moment but we are still seeing significant numbers of mortgage originations so this is not really the determining factor. The key focus for us is the training and development of existing and new prospects for general insurance and life products to ensure better penetration within our whole mix of products and services.”