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Mortgage Networks: Pros & Cons of Mortgage Brokers Going AR or DA in 2021

Since mortgage networks have been in existence, the age-old question of whether mortgage adviser firms should choose to go AR or DA has been there too.

One of the most important decisions a mortgage broker could make is deciding whether to become an appointed representative (AR) of a network or to be directly authorised (DA).

Here at Stonebridge, we offer mortgage broker firms a chance to be part of the Stonebridge network family as both AR and DR firms. But to make the decision simpler for you, we’ve put together a handy guide to break down the pros and cons of both options below.


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The Case For Mortgage Brokers Becoming Appointed Representatives (AR's)
The Case For Mortgage Brokers Becoming Directly Authorised (DA's)
Deciding Whether To Become A AR Or DA
Summary Table: The Pros and Cons of Mortgage Brokers Being An Appointed Representative vs Directly Authorised
Join Stonebridge as an AR or as a DA Firm

The Case for Mortgage Brokers Becoming AR’s

On the other side of the table, one of the widely cited risks for DR mortgage brokers is having to report straight to the Financial Conduct Authority (FCA), and being solely responsible for their own compliance. Many brokers will choose to remain as AR’s because of the protection it provides their business compared to the risk of future liabilities from advised mortgage sales resting with a mortgage broker firm that is DA. Many mortgage network heads recommend that brokers consider how they’d be affected if they were to report directly to the regulator, as regulatory demands are continually changing and increasing.

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The Case for Mortgage Brokers Becoming DA

Perhaps the biggest advantage for a mortgage broker to become DA is the complete control it provides over their business and the avoidance of of potentially big fees and loss of commission. Additionally, DA mortgage brokers can choose to use the most cost effective mortgage clubs and firms offering support services. Similarly, they can cut unnecessary costs, potentially lower their personal indemnity payments and perform their own compliance. They don’t face restrictions in regards to the mortgage and/or insurance products that they choose to sell to their clients, meaning they can be truly independent.

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Deciding to Become an AR or a DA

The decision to become an AR or DA comes down to whether a mortgage broker firm wants to benefit from the support and guidance that a mortgage network will provide to an AR firm.
Alternatively, if they’re comfortable in the market knowledge and compliance responsibility awareness they possess, they could choose to become DA and benefit from lower costs and the ability to run the business through their own framework, under the confines of the regulatory bodies.

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Summary Table: The Pros and Cons of Mortgage Brokers Being Directly Authorised vs Appointed Representatives

The Advantages and Disadvantages of Joining a Network as an AR or a DA

Directly AuthorisedAppointed Representative
+ Run your business as you'd like to and tailor support services to your individual business.+ The network your firm belongs to take liability.
+ No network fees.+ Professional indemnity costs are generally lower than those for DA's (excluding networks with a chequered past).
+ Keep all your procurement fees.+ If any unexpected issues arise, you have the security of a bigger network to fall back on.

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Join Stonebridge as an AR or as a DA Firm

Whether your business is better suited to being part of a wider mortgage broker network as an AR, or, if you’d prefer the autonomy of being a directly authorised mortgage broker, Stonebridge have both options available to your firm. Find out more about:

Becoming an appointed representative of the Stonebridge mortgage networkBecoming directly authorised with Stonebridge Genus
Stonebridge AR Network Proposition
Our Mortgage Proposition Our DA Proposition - Genus



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