Broker Conveyancing has called on networks to take control of their conveyancing propositions in order to reduce risk and improve income revenue.
The broker-focused conveyancing distributor believes too many networks are paying lip-service to the conveyancing options they offer their appointed representative (AR) firms and should instead look to deliver a proposition which ARs can ill afford not to use.
Broker Conveyancing argues that currently most networks either overlook their conveyancing services for ARs or promote external distributor propositions which offer the network very little. It says networks should instead look to white-label their own offering from a distributor and work to ensure every AR firm uses that proposition instead of going outside the network.
The firm believes there are many benefits for both networks and ARs by adopting this approach not least the fact networks are able to build in a higher fee level for both whilst still ensuring the client secures the cheapest pricing.
It also claims that a white label offering also delivers peace of mind when it comes to ARs dealing with solicitor firms given the distributor vets all its panel members to ensure they have a clean bill of health and are not involved in any fraudulent behaviour. Broker Conveyancing believes many networks are running a potential risk by allowing ARs to choose from the many thousands of solicitor firms available and have not been subjected to a strict due diligence programme.
Harpal Singh (pictured), managing director of Broker Conveyancing, said: “We read all too often about the significant pressures networks are under today particularly financial and also from a regulatory and fraud point of view.
“One area where networks could adopt a more forward-thinking strategy is within conveyancing where far too many firms are not informed or active enough. We have looked at a number of networks and they are often allowing their conveyancing proposition to wither on the vine allowing AR firms to do as they wish in terms of selecting solicitor firms, recommending a service to clients and securing income from the instruction. This is a major risk for any network and seems madness when there is the opportunity to white-label a system from a distributor like ourselves. Doing this not only ensures the network has much better control over conveyancing but should also cut down on the regulatory risk and deliver benefits to the bottom line.
“We are able to build into a system any number of preferences and options which means the network is truly in full control and will ensure they are able to get the most out of this potentially lucrative business area.”
While there are some merits in this, my experience with a network some years ago was that the interests of the principal and the small AR brokerages were not aligned.
The principal sought the best financial terms, online referral and commission tracking and glanced at the statistics on service levels to justify promoting the white label service.
The conveyancer was primarily concerned with keeping the network happy for the volume of business and not the small AR, so would focus on the larger ARs and not treat each introducer as a customer in their own right.
The small ARs soon realised they could agree direct terms with competitor conveyancers with assurance of the service levels and better financial terms (as no commission share with the principal) and accordingly were a party to the introducer relationship. These small ARs were also those most likely to refer and so the large volumes were never achieved and the introducer relationship with the principal dissolved in time.
As solicitor referrals are not regulated, it is important all brokers ensure the relationship works primarily to service their clients first and all other elements should be secondary.
We were using a large firm until recently and have now found new fees being introduced (not declared until the bill is sent to the client) and experienced poor service, so have moved to a new firm with better transparency. The decision was ours to make and made quickly to avoid further customer detriment.
The law profession has still some way to come to meet the higher regulatory standards of mortgage brokers (ironic I know), so it is important firms maintain tight control on what is being offered. Principals imposing such services will merely see brokers not bother rather than risk losing a client for £50.