Speaking about networks in the mortgage and financial adviser sector at the Financial Services Authority’s retail intermediaries sector conference, Simon Chamberlain, chief executive of Thinc Destini, said he believed networks had failed to evolve and were now obsolete.
He said: “The market has evolved. There has been a failure by networks to provide a sustainable profit model and have been overtaken by time. When they were first set up, client dynamics were different but they have been unable to evolve with the times.”
His comments have brought a mixture reaction from networks.
Jared Aitken, media relations manager at Sesame, said: “The role of networks has increased following mortgage regulation and we have seen a real appetite among mortgage advisers looking for help in adapting their business to the new environment.
“Our experience in managing FSA regulation and providing face-to-face support provides advisers with the peace of mind of knowing they are operating compliantly. Critical mass is also crucial and it gives large networks the opportunity to negotiate the best proc fees, service standards and exclusive schemes for advisers.”
However, Payam Azadi, head of marketing at Mortgage Times, believed there was some truth in his words.
“There are people that have moved with the times and have invested in technology and education. There are good success stories out there. However, some of the traditional IFA networks have stuck their heads in the sand and failed to respond.
“There are those who are out-of-date and other models out there which are doing better. There is so much competition in the market now that if brokers are unhappy with their network, they can move to one with a slightly different proposition.”
