Advantages and Disadvantages of becoming an AR?
Appointed Representative
Probably the most common method of doing business for financial advisers specialising in mortgage, pure protection, and general insurance only.
The Advantages.......are that it makes budgeting easier for the adviser with very low fixed costs, as the majority of expenses such as PI cover, compliance fees and sourcing costs are taken as a retention of commission earned. Being part of a network can also give an established route for business through their mortgage or insurance panel, and a good network can offer help with marketing, and field support. Many advisers who choose this route do so because it can greatly reduce the increasing workload associated with compliance, effectively a good network offers compliance in a box, setting out procedures which if followed ensure that the adviser is compliant and leaving them with more time to actually do business.
The Disadvantages.....are that you will be working within the networks compliance framework. This need not be too much of a problem if the network has a good compliance regime, robust but not too restrictive, but some networks can be over the top with compliance, leading to frustration especially for more innovative and sales focused advisers. Another perceived disadvantage is limitations on lenders and insurers imposed by the majority of networks using panels. The reason I say “perceived” is that most of the networks now will allow advisers to go “off panel”for mortgages where necessary, and with a broad insurance panel often with an impaired life insurance provider the benefits of the network tend to outweigh this disadvantage, and there are very few time this will cause a major problem.
Is it right for me? That depends upon if you finding a network with systems, procedures and a character, that compliment rather than oppose the way you work. The relationship should always place the adviser in control, if the “tail tries to wag the dog” the relationship is unlikely to be a beneficial one. Size is not that important, we have placed businesses with annual income between £9,000 and £280,000 with networks, and similarly in the current climate some of the smaller networks who run a “tight ship” in terms of their expenditure and budget coping with the downturn much better than some of the industry giants.
If you like to get on with doing the business rather than looking after the administration side of it then becoming an appointed representative might be right for you.
Just click here, and fill in our enquiry form.
It’s the first step to finding the right network for your business.
Mortgage Networks.co.uk is a trading style of Which Network, the UK’s leading Mortgage and Financial network consultants