Mike Fitzgerald, sales director at Brentchase Financial Services, told Mortgage Introducer that he has spoken to a number of network representatives who admitted they are avoiding the GI market because of the amount of administration and paperwork that is required when combined with the mortgage business they already do.
The revelation comes at a time when the industry has been trying to encourage brokers to place more GI business.
This is to recoup lost income as lenders streamline mortgage proc fees and the sector recovers from the impact of regulation.
Fitzgerald said: “All the networks I have spoken to have told me they are doing less protection and GI business because of the onerous amount of paperwork involved. At least nine networks have said this to me, including the successful, larger ones.”
But Sally Laker, managing director of Mortgage Intelligence, said: “We have a full range of mortgage-related GI products available to our appointed representatives (ARs), all accessible through our IT system.
“However, if it was all paper-based then perhaps it would be more onerous and some networks may be finding themselves in this position.”
Richard Griffiths, managing director of Network Data, retorted: “There are a few issues here. What Sally is saying is a bit of a nonsense.
“The commissions paid by GI companies are not electronic and, even if they are, they sometimes have to be keyed in manually to your own admin systems. For someone to have to do this and use up these resources, you have to question whether it is worth it.”
“But on the other hand, GI generates a lot of money and we offer our ARs a full GI service,” Griffiths added
