Brokers turning to introducer status, says Vesta
Vesta has reported that brokers refusing to join networks or become directly authorised helped fuel a 52 per cent rise in its sales during 2005.
It reported business levels increased dramatically in 2005, compared to 2004, as increasing numbers of brokers have decided to channel business through Vesta’s Packaging Plus scheme. The scheme allows brokers to hand mortgage case contact details to directly authorised Vesta for it to perform the rest of the process, including all compliance work.
Mark Leaper, managing director of Vesta, believed there was a groundswell of broker sentiment against networks and by the end of 2006 only a small ‘rump’ of networks will remain. He said Vesta has benefited from intermediaries’ growing disillusionment with networks who they feel are expensive and far too restrictive.
He added: “The key reason for the sales upturn is that more and more brokers are realising they do not need networks, direct authorisation, or have to handle compliance. They can side-step all of that by getting us to perform the regulated sales process.
“The appointed representatives (ARs) we speak to say they have lost control with the way they do business and think networks have become too manipulative. And, to cap it all, some are withholding procuration payments to try to prevent their ARs from leaving. We have lots of customers who have resigned from networks because of this and have decided to stick to what they do best – service their clients’ needs.”
Mike Pendergast, IFA at Zen Financial Services, said: “It sounds good for people who do not complete that many mortgages and want to hand over the packaging of applications. With regards to disillusion with networks, I’m sure packaging is cheaper but probably doesn’t have the same benefits as a network.”