When considering joining a network, brokers should ask some key questions of any potential provider.
But first, a couple of prerequisites. Do not accept platitudes. You will be making a contractual commitment and before doing so, you need accurate and precise answers. I know such an observation applies in all walks of life, but it bears repeating.
Second, if you want accurate responses to all of your questions, accept that you are going to have to give out some potentially sensitive information to your prospective network. Make sure they have signed a confidentiality agreement before discussions start in earnest.
Here's my Top Ten questions -
1. Who are the network's principal/majority shareholders? What are their backgrounds and what are their aspirations for the network? Do these appear reasonable and achievable? What capital have they committed to the venture, and are they well funded?
2. What are the joining and ongoing costs of network membership? A statement that "Our commission uplifts will cover the cost of membership" is simply not good enough.
3. Are there specific IT requirements and if so what are the costs? Don't forget to take into account the cost of exiting existing contracts, data transfer and training. Also ascertain what the position would be if you wanted to leave the network (i.e. is the software bespoke to the network), and ask about data ownership in such circumstances.
4. Exactly what assistance is provided to achieve FSA compliance? Is there a separate charge, and if so how much is it? Do not accept "support" as an answer - get them to be specific. Exactly what do I get, when do I get it, and where do I get it?
5. What agency facilities are available to network members? Once again make sure the answers you get are specific. What level of agency will a member enjoy with which carriers? Do these terms apply to both personal and commercial agencies? Are there dedicated underwriters, and teams servicing network business? These questions are particularly ripe for sweeping and unspecific answers - don't accept non-specific responses.
6. Does the network have any bespoke or unique underwriting arrangements? Does it operate an underwriting agency for example, or have its own wholesale facilities? Remember each time the network uses a third party to handle unusual risks there is almost certainly an additional mouth that has to be fed.
7. What other services does the network provide? Are these additional services chargeable?
8. What restrictions are placed on network members when it comes to using other "non approved" insurance markets? Are there minimum support level requirements to the preferred markets?
9. What is a typical network member in terms of size and make-up of business? How does this fit with your own profile and development plans?
10. At what point will you be given the chance to take up references from existing network members? Will you be given a free reign to choose the member you want to talk to? If not, ask yourself why? The salesman will almost certainly want to give you his 'pet' reference, so stick to your guns. This is where you really find out whether what you are being told lives up to the promise!
Don't rely too heavily on references from insurers - they often have their own agendas, (the local office might not want to lose your account for example) so be circumspect with any such references you do seek out.
