Mortgage AR or Introducer ?

ericwright_3

I have my CEMAP and am considering becoming an AR for a morgage network.
I have some experience of introducing clients to mortgage brokers, but not of arranging mortgages, as that entails FSA authorisation.

I am confused as to the requirements necessary to join a network as an AR, whats the best network to join, and what process is involved in becoming an AR?

Once I become an AR, can I then submit cases to the network ?

Please help

kingstreet

If you join a network, you become the appointed representative and you become authorised to give mortgage advice. You will be expected to reach competent status and you will submit business direct to lenders, not to the network.

The network will provide you with sourcing software, compliance support, PI cover etc, in return for a fee or a percentage of your business.

The application process is lengthy with financial assessment, FSA application, credit checking, referencing and competence/knowledge testing.

The alternative to a network is to approach the FSA for direct authorisation but at this stage in your career, this appears unlikely to be successful as you have no direct experience.

I'd suggest you're better off working for a broker for a while before you think about setting up on your own.

Conrad

I'm glad I'm not an AR. As a Directly Authorised firm I get to make all my own decisions and can use ANY lender. I can get free compliance support simply by submitting biz through a network so they get a tiny percentage of each commision - this is not the same as an AR network. You will find AR groups tend to want you to focus on certain lenders and will often decline a case even where a lender accepts it. I guess AR is the way to go if you want to be self employed from the outset.

Surprised you want to get into a very difficult business though.

_Andy_

ericwright wrote: »

I have my CEMAP and am considering becoming an AR for a morgage network.
I have some experience of introducing clients to mortgage brokers, but not of arranging mortgages, as that entails FSA authorisation.

I am confused as to the requirements necessary to join a network as an AR, whats the best network to join, and what process is involved in becoming an AR?

Once I become an AR, can I then submit cases to the network ?

Please help

Eric - why would you want to do this given the current climate?

magpiecottage

I think others are right. You would do better to work for a broker first.

If you join a network, be aware that you will have no control over how they deal with any complaints but will be expected to pay any redress and FOS fees, even if you have already left the network.

So they have you hooked for life.

ericwright_3

Many thanks for all replies.

I know the market is somewhat stagnant at the moment and although it may not be a good time ideally to get into mortgage advice, I think it is possible for me to learn the ropes and become experienced until the market improves!

I am confused still - If I become a AR for, say, PINK home loans, I will be able to submit cases through PINK to lenders on their panel won't I? Or will I be submitting cases to PINK to arrange for the client ?

Alternatively, what is life like for Mortgage introducers (IARs) ?
Please advise

kingstreet

ericwright wrote: »

I am confused still - If I become a AR for, say, PINK home loans, I will be able to submit cases through PINK to lenders on their panel won't I? Or will I be submitting cases to PINK to arrange for the client?

You'll be submitting cases to lenders as a Pink AR, not to Pink. Alternatively, you could introduce to a Pink AR and ask them to teach you the ropes while you introduce.

Effectively, you need a broker to mentor you as a trainee and to provide a supervisory regime and it's unlikely you'll get a network to do that for you, although it's not beyond the realms of possibility.

ericwright_3

Thanks

As an introducer, arent you rather limited as to how much work you actually do, i.e. is it simply a case of passing on names and numbers , or can I effectively pass on the mortgage case/application ?

I have quite a good client base and so I will be passing several 'leads' or cases on a weekly basis.

Instead of becoming AR for a network, can I become an AR for a Mortgage company ? If so, I think this would be better - I work at my independent office submitting cases to a fsa registered mortgage company, not a network or club.

What is the best course of action ?

wodgerdodger

As others have already stated life as an ARis not a bed of roses and you will have to factor in the delay in receiving payment until cases complete which can typcally be 3 months fromwhen you first speak to a prospective client.
When the mortgage market was bouyant there was sufficient volumes to counter this but in the present and forseeable future this is not likely to be the case.Even established ARs and DA authorised brokers are scratching round for business and cannot rely totally on proc fees for mortgages.
Additionally with Lenders having no appetite for volume lending they do not have to rely on introduced cases hence the push for more direct business.
Have you considered learning the mortgage business as an adviser with one of the Lenders?. At least you would have a gauranteed salary normally with bonus on reaching certain targets. The training will be fully compliant and dare I say it you will be taught a structured and compliant process in conducting mortgae interviews. Gaining this experience while the market is flat should give you a solid background to take the leap into the AR or DA market when there is a more positive trend appearing.

dunstonh

I think it is possible for me to learn the ropes and become experienced until the market improves!

Just as around 1/3rd of IFAs and tied agents drop full authorisations to become mortgage and insurance only.

Network is a term used to describe many business models. Some networks are very intrusive. They even end up owning the client bank. Others are lighter touch and just want you to follow their compliance. There are far too many only mortgage networks. Some are going to fail. Others consolidate. You need to make the right decision as its not easy moving later.

herbiesjp

As an Introducer that is all you do - Introduce.

Basically pass on your client to a broker.

You have no role in the advice process as you are not registered to do so - that is all taken care of by the broker who is either an AR or DA.

If you are passing on "leads" you do not need to be either AR or DA - you need to pass them on to someone who is.

If you did become AR or DA would that detract from your current occupation? All the training, compliance and paperwork and endless chasing involved is very time consuming - could you really balance the 2 jobs?