By Chelsea Kiefert, National Account Manager, The Right Mortgage & Protection Network
When researching which to join it is very easy to have tunnel vision and just collect the information on what is most important to you. However, there are several factors you must consider, question, and evaluate before you make that final decision. The last thing you will want is to regret your choice and feel you have just jumped out of the fire into the frying pan.
1. Fair Pricing
“What do you charge?” is frequently asked question. Most of the time advisers will focus on what the adviser fee is, and fail to consider the bigger picture; FCA fees, firm charges, professional indemnity fees, supervision fees, application submission fees, failed file check charges, leaving fees, and any other annual fees the network may wish to bill. In addition to this, the requirement of when these levies are to be paid. If one of your most important reasons for joining a network is fair pricing, then consider all costs involved, and ensure it is fair.
2. Read before you sign
Many firms do consider leaving their network; however, they have found themselves being stuck due to the clauses within their network contract- the contract that they signed! Look out for clauses around exit/leaving fees, professional indemnity insurance charges, and tie-in periods. How much will it cost you to leave? Should there be any fees, are these one-off payments, or are these charges ongoing for a number of years? If so, how are these charges calculated? If you are offered any form of ‘free fees’ to join, or a ‘golden handshake’ ask these questions to understand fully what your future fees will be and what your tie-in period is. Afterall, ‘nothing in life is ever free.’
A further consideration is client ownership. Being self-employed and owning your own business you would think this would not have to be questioned. Yet, it is surprising to hear the number of networks that have clauses within their contract that confirm they own your clients. What does this mean? Should you decide to leave the network, your clients may be passed to another company to service.
How much notice are you required to give and can you novate? Some may question why a notice period matters, but your notice period determines how quickly you can be authorised elsewhere, and ultimately, start earning again. Some networks will have lengthy notice periods so it is significant to query if you will continue to be paid your commission during our notice period, and if not, when will you be paid? Some networks may also agree not to novate. This means your renewal commission that has significantly built up over time will stay within the network.
Tip: If the network can novate, check to see if there are any charges for doing so.
I reiterate the importance to read and understand the contract before you sign it.
3. Clear, fair, and not misleading
As you know, your advice to your clients should be clear, fair, and not misleading. Would you agree that a networks panel selection for ARs, commission payments, and structure should also be the same? Where a network offers enhanced commission with a limited panel, the likelihood is the client’s insurance premiums are loaded i.e., more expensive. Some advisers are fine with this, others are not, so take the time to understand whether this is case or not. If they are loaded, ask by how much?
It is useful to also know how payments are calculated, how frequent payments are, and if there is anything that can prevent payments from being made.
Tip: If a network agrees to take 10% from your insurance commission, question 10% of what? Check to see if there are any hidden overrides, extras, pay aways etc. in the background which could affect your bottom line. Agreements should be transparent.
4. Technology should make your life easier
Given the world we live in moves at such a fast pace, and with some clients being particularly demanding at times, the last thing you want is to be spending hours and hours having to use a back-office system that is not fit for purpose. Ask to see a demonstration of the systems you will be required to use and analyse how well these coincide with your business process and model.
Point to note: If the back-office system you require to use has been created by the network and is owned by the network, how easily available is your client data should you ever wish to leave?
5. Protecting your business
Although compliance can sometimes have a negative perception, it should not. The compliance procedures set by a network should be in place to protect your business and the advice you give, not hinder it. When asking what the compliance processes are like with a network, you should ask what their sales processes are, how experienced their compliance team is, how accessible the compliance team is and how files reviews are conducted and fed back to the adviser. Will the file review feedback be consistent, or will it differ from week to week depending on who completes the file review?
6. Not just a number
Not only should a network protect your business, but a network should add value to your business and clients. You do not want to feel that you are just a number! You should feel that it is a two-way working relationship, and know you have trust, respect, and commitment from your network. Regardless of your goals and aspirations it is vital to have the relevant expertise supporting you in where you want to be. Consider aspects such as sales training, 1-1 business coaching, peer development sessions, and marketing support. What does the network do to help you generate business? Do they understand the importance of response times (especially where financial promotions are concerned)? What marketing material and services do they offer? Are you able to offer all services for your clients? Question how beneficial the network would be for you and your clients. Afterall, a network should be supportive with your business and the direction you want to take it.
For those that have already have moved networks before, you will know this requires planning, keeping working relationships amicable, and that timing is key! For those that have never moved networks before but are considering it, or for those that are new to the network space, ensure you ask the questions to avoid any potential detriment to you, your future plans and your clients.
Final Tip: Resignations should be sent by email and followed up by letter if required, and your exit requirements should always be completed. Failing to follow these two points could implicate your future authorisation. There will be advisers that have stories to tell on this.
