The overwhelming benefit of being part of a network is the compliance guidance and framework provided, giving members peace of mind and allowing them to get on with what they do best, which is advising clients to find the right financial solutions.
It is the role of a network to interpret the many guidance papers issued by the regulator and implement these within the business. Moreover, the impacting requirements on its members should be communicated to brokers in a way in which they clearly understand what specific actions they need to adhere to and any changes to sales process that should be implemented. This way advisers get the essential information without needing to wade through multiple pages of rules.
Of course it remains the responsibility of the adviser to adhere to the processes outlined and follow the guidance given to them. As the network carries overall responsibility for the regulated activity, it will, of course, have schemes in place to monitor the advice given by its advisers as well as their ongoing competency.
In addition to informing advisers about the changes they need to make and new regulation when it hits, it is also responsible of a network to keep the brokers aware of forthcoming regulatory matters, ensuring they are always aware of the impending changes on the landscape.
The larger networks particularly will work to create relationships with the lenders and product providers so they can also provide exclusive products which should be amongst the most competitive in the market, with top tier proc fees in return for quality business.
However, joining a network should be about more than just compliance and good rates. The more discerning brokers will expect so much more for their network fee these days. A network member should also receive regular support in a number of other ways including: training, one-to-one guidance from a personal business development manager; telephone help desk support with advice on placing more difficult cases; face-to-face access to lenders and protection providers; help putting together an effective business plan, even help with recruitment if it’s needed. This should be in addition to incentive events and recognition when an adviser is performing particularly well.
So why wouldn’t you join a network, what are the disadvantages?
The biggest reason someone would choose not to join a network is the sense of control. Some advisers prefer to design their own sales processes, have their own relationship with the FCA as well as lenders and providers and do not want to be told how to do things. This is typically a more realistic model for larger established businesses which have the finances to build the infrastructure needed to go it alone employing their own compliance, finance and administration staff.
Most networks run a selected panel of lenders and protection providers offering comprehensive and best of breed choice for members and their clients, so if an adviser wants access to every lender in the market, and to run their own due diligence checks, then it is likely they would not join a network.
Some advisers also prefer to be paid directly from lenders rather than be paid via the network as they feel more secure with this, however, they will in turn need to hire someone to work out what has been paid to them by which lender or provider and for which piece of business. Some brokers may challenge the value of their network membership fee; however this can be mitigated by advisers doing their homework, understanding exactly what their fees cover and selecting their network partner carefully.
Many of the people who are wary of networks have been part of a network that they have had a bad experience with. What is key for a good network experience is to find a network that has similar values to you, will provide the support that you need in the way that you need it and can give you access to the products and exclusives that will be most beneficial for your clients and your business. Most importantly, you need a network that is financially secure, with a strong parent company that truly understands the network’s business. It is always worth talking to brokers already in the network you’re thinking of joining to see what they say about it too. Any good network will be happy to share testimonials from existing members.
Of course, networks also have very high standards in terms of who they accept into their network. Advisers that have been expelled by another network or excluded from using a lender will find it almost impossible to join a good network.
Fundamentally, networks provide an umbrella of safety as well as a mechanism for advisers to achieve their goals and be rewarded for them.
