Mortgage networks have come in for fresh criticism today for discouraging the use of claims management companies.
Cartel Client Review singled out Home of Choice (HoC) as the latest firm to follow the trend following attacks on Intrinsic Financial Services and Personal Touch Financial Services (PTFS).
They stand accused of sending letters to members warning them they do not approve of appointed representatives (ARs) recommending claims management to clients.
Carl Wright, managing director of Cartel, says networks are more conscious than ever of maintaining relationships with lenders.
"Home of Choice, Intrinsic and Personal Touch have pretty much copied each other's letters, they are saying the same things," he says.
"Many of them have been telling their brokers they should diversify, but then complain about recommending a claims management firm. I understand where the networks are coming from, because they have one foot in the broker camp and another with the lenders."
Wright says the issue is likely to drag because the claims management sector is a big market. "I think the sector has a good fifteen years left and it is recession-proof because a claim is a claim in bust or boom," he says.
Dev Malle, group sales director at PTFS, defends the company's actions, arguing it is a worry for networks that advisers in a difficult market are considering claims management as an income stream, without thinking of the consequences.
"We have concerns for a number of reasons and have highlighted them to members and would rather they continue to service their clients' needs," he says. "It is a moral issue too, as the client may be happily moving along without problems when persuaded to take this action by an adviser."IFAonline
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