Let’s start with a definition. A mortgage network is an organisation authorised by the FCA to accept full responsibility for providing a compliance umbrella for mortgage brokers to engage the public and offer advice on mortgages and associated insurances, such as life and GI cover.
A mortgage broker and their firm become an Appointed Representative (AR) of the network and agree to manage their business within the guidelines and rules laid down by the network. In return, the AR no longer has to deal directly with the regulator and can concentrate on seeing customers and writing business.
The network will provide access to a panel of lenders, which it has approved and which might from time to time offer exclusive products or better terms to customers of the network. Brokers wanting to use lenders not on the panel is usually subject to negotiation.
Speciality lending such as equity release, commercial finance or bridging, for example, differs from network to network but will need to be agreed in advance through the group’s compliance function.
Networks will charge an annual or monthly fee as a condition of membership, which pays for the support they receive. Included in the fee is a proportionate cost for PI insurance.