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"Similar to finding the right network for you, it is worth looking around when choosing the right club"
Compliance regimes from Networks must be one of the leading pushing points for advisers when it comes to making the jump into direct authorisation. Whether it is due to 20 page suitability letters for advisers writing their own life policies, or figuring out the difference between a soft fact and a hard fact, there are enough reasons for advisers wishing to take back control of their business. Although being directly authorised means you do not have to follow compliance processes written by a Network, there is still a requirement to remain compliant and follow FCA rules and guidelines. Providing you follow advice from a professional Compliance Service Provider and have appropriate procedures in place, keeping up to date with FCA regulation by yourself is not as complex as you may think.
There is a common misconception among advisers that look to become directly authorised on the sole basis that they will receive the gross amount of their commission and will therefore be better off. Depending on the Network you are with and your set retention, in some cases this can be true. There are Networks that take a cut of broker fees and have retentions that can’t be justified against the support you receive in return. Upon becoming directly authorised, in order to have access to competitive commission rates with the providers you will have to use a Club unless you write a substantial amount of business and are able to negotiate rates yourself. There are Clubs that will charge a monthly fee or even a percentage of your turnover at the end of every year just to be able to access their rates. There are Clubs that prefer you to align all of your agencies with them rather than let you make the most of being directly authorised and place individual agencies where they are most competitive in terms of commission. In comparison, there are also Clubs that are completely free to use and won’t tie you in - like us!
Directly authorised advisers will sometimes argue that mortgage clubs shouldn’t get a 'top slice’ of their proc fees and that they should be able to get the same proc fee amount direct. However, you should weigh up what your mortgage club does for you in return when thinking about the top slice. Does your mortgage club have over 75 lenders for you to choose the best deal for your client? Would you have access to these lenders if you went direct? Do they provide you with a help desk for hard to place cases? Do they provide the option of proc fee payment on exchange? Do they provide a comprehensive list of roadshow events for you to attend? Are they free to use? These are all factors you should consider when thinking about choosing a mortgage club for your business.
"Whether it is due to 20 page suitability letters for advisers writing their own life case, or figuring out the difference between a soft/hard fact, there are enough reasons for advisers to take back control of their business."
Following on from the above main selling points of direct authorisation, choosing the right club for compliance must fit in with your business model. You may find that your Compliance Service Provider charges you a monthly fee of £200 per month just for a monthly email update and access to their document library. Alternatively for the same cost you could find yourself with an Annual Audit visit, 8 file checks, GABRIEL return completion, annual testing and an Online Compliance Hub at your finger tips https://therightdaclub.co.uk/compliance-support/. Similar to finding the right network for you, it is worth looking around when choosing the right club what suits your business best.
Does your current Network help you grow your business and encourage you to make the most of your ancillary services? Some advisers may be worried that by going Directly Authorised they won’t have access to ancillary services to offer their clients and other advisers may not have had this support from their Network in the first place so haven’t even thought about it. Using a Club that offers other services so that you can provide your clients with a holistic service should always be a motivating factor - isn’t that the reason you wanted to become directly authorised in the first place?
If you would like to find out more about The Right DA Club, feel free to message me for more information or request a brochure here