m2i, the leading support services solution for directly authorised firms, is concerned that some intermediaries may be waiting until the last moment before seeking the necessary services to support their trading activities post M-day.
Whilst the October 31st deadline, does give intermediaries time to decide what they need, and who they wish to use as a supplier, many could be waiting until the last moment to sign-up in order to save on membership fees. This applies to all firms, whether choosing the directly authorised route or opting for Appointed Representative status.
m2i believes these firms will be making a mistake, and that the sooner they join their chosen supplier, the better. This is because:
Intermediaries need to carefully consider and experience a network's offering, and not just look at price, to ensure they have made the right choice; and,
Once the decision has been made it will take at least 3 to 4 weeks for all the relevant processes to be put in place to support the intermediary, including a compliance visit.
If all intermediaries continue to delay their decisions, there could be a bottleneck created in terms of installation work around September and October which would be to the detriment of the industry ahead of regulation.
Sean Hornsby, Managing Director of m2i, said "This is an issue all networks and support companies face, not just M2i. I have concerns that intermediaries do not recognise the implications of joining later, which we saw happen with the initial FSA application deadline. A number of firms applied to us in the last days leading up to 31st March in order to get help with their application and it simply couldn't be done in time.
"Many still joined m2i because of the benefits, but it was a classic example of leaving things too late. It now seems evident that many intermediaries are playing a waiting game on their decision of who to join. If a Network is doing its job properly, then it will need to assess the intermediaries application, ensure all technology is installed and training given, ensure all processes are in place and adhered to, which is likely to involve a compliance visit, and generally make sure the firm is totally up to speed for M-day. This can't be done overnight.
"I realise there are some savings to be made in delaying payment of membership fees for as long as possible, however, the likelihood is that a firm that approaches us in October will not have a compliance assessment until post M-Day. It's up to the firm to decide if that is a risk worth taking, in order to save a relatively small amount of money. Over the past few weeks I have been astounded by the number of firms who claim they are going to be directly authorised, yet have not even submitted an application to the FSA."
m2i provides a comprehensive package which supports those firms choosing direct authorisation. It is unique in the marketplace offering benefits such as soft packaging that, at present, no one else can offer. Other benefits include: white-labelled website; free mortgage leads; enhanced general insurance commissions; 50+ lender panel; sourcing and compliance software; client management software; full regulatory support and guidance; compliance and audit visits; and, marketing and promotional support.
Mortgage 2000 provides Appointed Representative network status through HomeLoan Partnership based in Worthing, West Sussex. A similar range of benefits is available with the added comfort of having a Principal take full regulatory responsibility for compliance, T & C, financial promotions, PI insurance and overall conduct. Network membership fees are based solely on a simple percentage of turnover dependant on the number of advisers and business volumes.
Martin Cave, Managing Director of HomeLoan Partnership, said "Our experience is much the same, in that many existing and new members are saying that they intend to become our Appointed Representatives and we are encouraging them to begin the formal application process by July and no later than August. Many do not realise that it takes 6 to 8 weeks to complete the mandatory fitness checks and then there is an Induction Training Course to go through. In fact, applying early could be financially rewarding because we have negotiated higher procuration fees and commissions that members can have as soon as they are appointed."
To sign up, or to find out more information:
Email: [email protected] or call 01244 665 700.
Alternatively log on to www.mortgage2000.co.uk.
