Since the onset of mortgage regulation on 31 Oct 2004, some 30 months ago, there has been a steady growth in the number of brokers joining mortgage networks as appointed representatives (ARs).
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Network Data publishes a quarterly league table of these networks. Since the first quarterly table appeared dated 31 Dec 2004, the number of AR firms has grown quarter on quarter and is up by nearly 70 per cent.
We believe this growth is fuelled by brokers’ increasing realisation of the costs and risks of operating as a directly authorised firm, and the suffocating rules and fines imposed by the Financial Services Authority.
At Network Data, we have had a number of complaints against our member firms referred to the Financial Ombudsman Service (FOS). We have undertaken a thorough review of all these cases and been at the forefront of representing our members’ interests.
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In one case, the AR firm arranged simple life cover for the client who later developed a critical illness. He believed he was covered. The FOS agreed and awarded the claimant a sum of £54,000.
Fortunately, the group professional indemnity insurance cover arranged by Network Data paid out £44,000 and we were left with a liability for a more modest £10,000 excess figure.
