The warning comes following a series of high-profile collapses by firms providing mortgage brokers with services including networks, HIPs and conveyancing solicitors. In the past few months alone a number of networks have gone out of business leaving many appointed representative firms out of pocket, while the HIP provider, mysalepack, was recently placed in administration and the conveyancing solicitors, Wolstenholmes, has been closed by the Solicitors Regulation Authority.
Conveyancing Alliance is asking all broker firms to stress-test their relationships with suppliers to ensure they are fit for purpose and delivering the best service and terms in the marketplace. It believes a significant number of broker firms wait too long to investigate problems with a supplier, such as late payment of commission, and they should where possible not place business with a firm if there are ongoing difficulties with the existing relationship.
Harpal Singh, Managing Director of Conveyancing Alliance Ltd, commented:
“The likelihood is that more firms who supply mortgage brokers with services will go out of business this year and therefore it is very important that time is taken to review all suppliers to ensure they are the best available. Collapses such as Mortgage Times, Network Data and Premier Network Group should be salutary lessons to all those intermediary firms who do not fully investigate the relationships they currently have.
"In this type of situation there is often ‘no smoke without fire’ and for those brokers currently experiencing difficulties with suppliers, now is the time to heed the warning signs and try to get to the bottom of what is causing the problems.
“While the number of suppliers is falling, there is still plenty of competition in the marketplace be that for networks, HIP providers or conveyancing distributors. We would urge brokers not to place good business after bad and, until a problem is solved, firms should use different suppliers who can guarantee not just a quality service but prompt payment.
"Many brokers rely on historical relationships which may not be providing them with the most up to date and efficient service available. This is why now is not only the time to review what is available in the marketplace but it is this type of action which could mean brokers ducking the hit later down the line, should the worst come to the worst and the supplier collapses.
"Opportunity often lies elsewhere and if brokers believe their current supplier is not valuing their business, then there are plenty of firms available who will. We are urging all brokers not to settle for second best in what is still a particularly tough marketplace.”
