Considerations for Exiting a Mortgage Network

Which Network, Leaving a Mortgage Network

Considerations for Exiting a Mortgage Network

So here’s the scenario, you’ve found what you are sure is the right financial services network for you, the terms look fine.  You probably haven’t spoken to us or you wouldn’t be about to get into the mess you’re just about to get into, but let’s leave that aside for now.

The pearl of wisdom I’m about to impart is whatever else you do, stop now and look at any termination clauses in the contract.  It has come to Which Network’s attention recently that a number of large networks now have very aggressive termination clauses in their AR agreements.  It may be because the market is picking up they have decided that they would quite like to hang on to mortgage brokers who are profitable or maybe the network or part of the network is up for sale and they want to keep AR numbers up to impress prospective buyers, but for whatever reason some of them now have a distinctive sting in the tail.

Of course this doesn’t matter if you have researched all of the 20 or so alternatives, analysed the value they give by comparing the commission and proc fees they give, against the retention and/or monthly fees they take and then adding in feedback on the effectiveness and flexibility of their software and compliance regime and overall satisfaction levels of current and past AR’s and therefore are 100% confident that your choice of network is going to be forever.  This of course means that any termination clauses in your agreement are totally irrelevant since you’ll never have to leave anyhow!

But remember even if all the above were true, there is more than one large network whose current backers are currently trying to offload parts of, or have said openly, they are always considering their options!  So if this was to happen and you didn’t like the new boss, who was definitely not “same as the old boss” as Roger Daltrey would say, wouldn’t it suddenly be important then?

Any company that has AR’s, RI’s, Members, associates, whatever you like to call them, has to a protect itself against the odd rogue broker who leaves and then swiftly tries to re-broke all of his protection business or doesn’t honour any existing debts he has.  This is fine and typically a network would have a 3 month exit clause, where an AR has to give 3 months notice and be fully paid up when they left but your business is your concern and you should at least check that they will allow you to novate insurance commissions and that their leaving requirements aren’t too onerous.