What is a Mortgage Club?

While independence and autonomy are two aspects of the role enjoyed by mortgage brokers and advisers, there is still a great deal of strict compliance which must be followed or else risk punishment from the FCA (Financial Conduct Authority). When it comes to making sure these guidelines are followed there are two paths a broker could pursue. The first is to join a mortgage network as an appointed representative which would see responsibility for adhering to the FCA’s rules and regulations assumed by a member of the network you choose to become part of. The other route is to instead join a mortgage club as a broker who is directly authorised. This way of operating will allow you, the adviser, to maintain much of the independence and autonomy you have gotten to experience while still benefitting from additional support in regard to compliance, marketing and general policy arrangements. The downside however is that you are solely responsible for ensuring you are working within the FCA’s guidelines.

If the prospect of working this way going forward is one that appeals to you, where you are able to maintain control over the way you engage with customers and arrange policies on their behalf, then it’s worth getting to know more about mortgage clubs on the whole. This includes what mortgage clubs are and how they work, as well as what benefits they might offer to a mortgage broker or financial adviser.

What is a Mortgage Club?

A mortgage club is an organisation which has been established with the goal of supporting mortgage brokers and advisers as they seek to reach their full potential in providing the best mortgage advice and services to their customers. Mortgage clubs allow brokers to continue to operate without having to abide by their inspection and approval process on customer-facing materials to ensure full compliance with the Financial Conduct Authority, but still provide value by offering access to various tools and services that will help them on their journey. From learning documents to toolkits to recruitment support, and everything in between, a mortgage club will allow advisers access to their comprehensive bank of resources which the adviser can pick and choose to use at their own convenience. In fact, they can work with multiple clubs at any given time to take advantage of all the resources on offer.

How do Mortgage Clubs Benefit Brokers and Advisers?

While we have already touched on some of the resources mortgage clubs offer to advisers so as to encourage loyalty and repeat business, it’s worth examining exactly how these add value to an adviser’s proposition and services. Some of the major benefits as to why a broker or adviser should use a mortgage club include:

• CRM systems – Access to leading technology and CRM systems will allow advisers to connect with customers and focus on meeting their needs directly.
• Broker support teams – Highly experienced broker support teams will support advisers as they look for solutions for customers. From basic queries to referral solutions for outsourcing complex cases, most mortgage clubs will pride themselves on the exceptional service delivered by their support teams.
• Networking events – Most mortgage clubs will organise events open to their DA firms and advisers. These will often provide an opportunity for advisers to meet not only the mortgage club staff but also their peers where they can network and share best practices.
• Tools and resources – Resources such as calculators, benefits tables and referral services will all be offered by mortgage clubs as a way to add value to their services, which advisers can take advantage of to simplify the process of setting up policies.
• Regulatory updates – As DAs are responsible for ensuring compliance with FCA guidelines, they may look to the support of mortgage clubs to keep up with the latest regulatory updates. Mortgage clubs who are proactive in informing advisers on changes to the regulatory landscape are therefore more likely to benefit from increased engagement in their communications.

WHAT ARE PROC FEES?

Procuration fees, or proc fees for short, are something most mortgage brokers should already be very familiar with. For those that are unaware however, proc fees are essentially a sum of money paid to a mortgage club by the provider who has arranged the policy on behalf of an adviser. Just how much is paid to the mortgage club is dependent on the proc fee percentage they have negotiated with a given lender. As the fee is actually deducted from the adviser’s own commission it’s natural that when it comes to arranging a policy with a provider via a mortgage club, they will opt to use the club with the lowest proc fee percentage. This makes proc fees a key area of competition amongst mortgage clubs, with firms regularly taking the time to examine changes to their competitor’s offerings when it comes to proc fees.

How do Mortgage Clubs Work?

The driving force behind any mortgage club is to help brokers and advisers retain and grow their customer base. Each mortgage club goes about this differently, which is why coming up with a definitive answer for how mortgage clubs work is actually quite difficult. In simple terms however, a mortgage club leverages their industry knowledge and suite of resources to support advisers across each area of service. Some mortgage clubs have specific areas of focus or expertise such as technology, compliance, lender relationships etc. and are favoured by brokers for specific products, and because they are free to call upon their services as and when they require them, it’s not uncommon for an adviser to use the services of multiple DA clubs while arranging a single policy.

What is the Difference Between a Mortgage Club and a Mortgage Network?

The difference between mortgage clubs and mortgage networks such as PRIMIS is actually something we have touched on before in a previous article. To sum things up however, the key difference between a mortgage club and a network is the approach to compliance. Mortgage clubs allow their DAs to operate freely and be responsible for their own ability (or inability in some cases) to meet any FCA guidelines. Alternatively, mortgage networks work with appointed representatives (ARs) who assign liability for complying with the rules and regulations outlined by the FCA to the network. While this means less independence and autonomy for the firm or adviser, it also means they benefit from an enormous ‘safety blanket’ which will all but eliminate the threat of punishment from the Financial Conduct Authority if any procedures are broken or regulations aren’t met.

If the prospect of being supported by an experienced mortgage club while still maintaining the responsibility of shouldering your own compliance appeals to you, then PRIMIS’ sister company TMA might be exactly what you are looking for. The TMA Mortgage Club has an excellent proposition complete with innovative training programmes, cost-saving technology solutions, flexible compliance support and bespoke relationship management. At TMA, your personal and professional development opportunities are the priority so get in touch and discover exactly what TMA is all about to start your journey as a directly authorised business principle.