Mark Wood says his network does not squeeze brokers in to fit a model, but allows entrepreneurial freedom
I read with interest Simon Burgess's article about networks "Caught in the net" (Features, October 19). I believe the article highlights the misunderstandings that exist in the market about what exactly a network is, and what it does. That's hardly surprising, as frankly all networks are distinctly different from one another. On this occasion, however, I believe that Burgess appears to be confusing networks with consolidators.
For example, on one occasion he talks about 'smaller players selling out to entrepreneurs', while in the same breath goes on to refer to those self same sellers as potential network members. He quotes Cornell Consulting's belief that around one third of brokers will join larger firms in the next three years, but then goes on to say that the resultant firms will no doubt join a network. I'm not aware of any of the current crop of broker consolidators contemplating joining Broker Network, although I'd certainly be happy to have a conversation with them!
To cap it all, Burgess then cites a number of challenges faced by independent brokers that he admits were solved by a network, but then asks at what cost? Unfortunately, he doesn't then provide an answer.
Let me try to set the record straight. I can't speak for all networks, but I can speak with some authority about our proposition.
Burgess says: "A broker loses his independ-ence when he joins a network." This is not true of Broker Network, where the core principle is that our members remain independent in all aspects of their business, while at the same time receiving significant benefit from the wide range of services we provide.
Burgess says: "FSA is putting networks under greater scrutiny." This may be true of networks where members are appointed representatives. However, all Broker Network members are individually registered with the FSA and each has its own compliance officer, so they are not subject to any greater FSA scrutiny than any other independent broker. In fact, the opposite is prob-ably true, as the FSA knows that we will have given the member the tools he needs to be compliant.
Burgess says: "Not every business model has identical working practices and resources, so how can one business model be squeezed into another?" We neither insist on an IT platform, nor on one pre-ordained view of compliance processes, but tailor our services to the individual requirements of the member broker.
Finally, Burgess says: "Networks are losing their appeal to sizeable brokers." A sweeping statement, but one I can again refute. The appeal of Broker Network has widened in the last year, and the average size of our recruits in 2006 is almost double that of two years ago.
The bottom line is that , Burgess does not know what he is talking about . As far as I know he has never been a network member, and he clearly has not bothered to talk to any of them before writing the article. Had he taken the trouble to do so, he would have found a group of hard-nosed, independently-minded businesses, which are overwhelmingly content with their network membership.
They know that, by being a member of Broker Network, the independent broker can marry the expertise and professionalism of his own people with the efficiency of our services, without stifling the entrepreneurial or independent spirit of his business. If this doesn't provide a leading competitive edge in a tough market place, I'm not sure what will. IT
Mark Wood is managing director of the Broker Network