Network competition should always be welcomed
Rob Clifford is chief executive of Stonebridge
For a number of years, it looked like the mortgage and protection network sector was unlikely to see many new entrants, if any, given a number of factors seemingly working against it.
Our group knows from over 30 years’ experience, that building and operating a network is not something you do on a whim, or as something of a sideline to an existing business.
It takes capital, recurrent investment, extensive resources, high quality personnel and real commitment to the ‘cause’ and therefore it’s been a real positive for the intermediary market to see a number of new network entrants announce their launches over the course of the past few months.
That suggests to me there is a strong market for quality network propositions, a growing scope to service AR firms, and an ability to deliver different types of offerings.
One size does definitely not fit all when it comes to networks and greater competition in this area can nudge all market participants on and ensure that networks are delivering exactly what AR firms need.
That latter point is undoubtedly key, whether you’re a network looking at what your AR firms want from you, or you’re a mortgage brokerage doing exactly the same for existing and potential clients.
Unless you understand and focus on what is important to those ‘end customers’ it’s unlikely that you’ll deliver a proposition they can buy into.
In that sense, and to our business, research has been vital because there is a tendency in our sector to think you know exactly what AR firms – or those looking to become ARs – want, and you end up delivering that as opposed to truly reflecting the very current needs of mortgage brokers.
For instance, off the top of your head, what would you consider are the most important parts of a network’s proposition for AR firms?
I’m guessing you would probably go for the commercial deal; great procuration fees and insurance commissions; access to a much wider array of products from lenders and providers; and the ability to take away the compliance and regulatory burden.
However, last year, we commissioned independent research taking the candid views of over 100 AR firms, in which we asked them exactly what their priorities are when it comes to their network choice.
Interestingly, the most obvious factors did not feature highly at all and instead the two most important parts of a network proposition were deemed to be both technology focused.
AR firms said they wanted technology that makes the sales process simpler for them, and access to both superior technology and IT support.
That might be seen as an eye-opener for some, but if you consider just how vital and central excellent tech is to the overall adviser business, then you are probably not as surprised as others.
Indeed, if you’re an adviser yourself, you’ll fully understand the benefits that this can provide you, the efficiencies it affords, and the overall difference this can make to your productivity and therefore your income.
It’s why we’ve focused a considerable amount of investment (hundreds of thousands of pounds annually) and substantial resources into our Revolution system, with a full-time team of over 20 developers working on a whole range of existing and future projects and support to improve the technology experience for all our AR firms and our DA partners.
That won’t change in the future either, in fact, the investment we deploy at our Revolution platform for mortgage advisers, will only go in one direction because this is where we make a considerable difference to both firms and their clients.
Interestingly, third in the AR firm priority list was having a friendly and personal culture within a network; to be treated like a valuable member firm and on first name terms. Again, that scored more highly than any focus on commission, products, fees, you name it.
I’m sure that all mortgage networks set out to love and respect their member firms, by delivering a personal and attentive service.
But it’s also clear that some fail to pull that off. The better networks clearly make their ARs feel part of the network family and work with them as if they are part of their team.
Part of the ongoing issue for some networks is that it’s hard to be personable if you don’t have the personnel to do it.
You come to learn quickly in this business, that human resource is vital, and it has to be across all manner of departments.
It can’t just be in the compliance areas, and not in the IT team, it can’t just be in your BDM team, but not in marketing, and so on.
Running a network with scant resources – human or otherwise – is a recipe for failure and you want to ensure that, whenever called upon, your AR firms have access to the teams/people they want, when they want.
Overall, greater competition within the network space is certainly something to welcome. As mentioned, it shows a strength of marketplace, it gives advisory firms greater options, and pushes us all to improve our propositions and, perhaps most importantly, to keep listening to the needs of our (and all) AR firms.