I saw the ‘eye’. No, I really did! I touched the Palanthir and suddenly blinding, intense, dark revelation struck me. You see something happened recently that convinced me that what I’ve been suspicious of for a very long time is actually true. Scary, but true.

A few days ago I sat through yet another evaluation presentation for a back office administrations system (yawn!). Now I’ve done them all - bin there, done that, read the book, saw the movie, bought the T-Shirt and the whole 9 yards. Although this time I was really impressed (more on this later). It was in the middle of this presentation, as I was navigating through the software’s compliance reporting features, that I clicked on ‘enter’ and saw the ‘eye’, gold and fiery right in the middle of the screen. As I froze, the eye slowly faded and revealed! I saw the hither to peaceful Shire of our industry being shattered by the gathering dark clouds of the Compliance Wars. Principal Wizard Saruman wants to build an army of Appreps and offers me benefits that would fill Paymentshield’s and The One Account’s Expo goody bags combined, and all I have to do is join him and sign on the dotted line. Sign over my life to him. Then I’ll come under his shadow and be protected from the Dark Lord Efesay Sauron.

My blood ran cold as I realised that Saruman has lots of lesser Principals who seem to be so graciously allowing little brokers an opportunity to join their army and also become Appreps too. The Palanthir screen then showed them transformed. No longer weak little defenceless brokers but now transformed and powerful Appreps, capable of working tirelessly through the night chasing to capture the next deal!

But behind all that magnanimous activity, the Palanthir showed that Saruman, far from offering anything really genuine or unique, was really doing little more than packaging a suite of services around technology that can be bought in and managed independently by anyone wanting to use it, to better effect, at lower cost, and without signing away one’s life!

Protection from Sauron without falling under the control of Saruman’s! Surely the best of both worlds? Most did not see the self interest behind Saruman’s gracious smile as many little brokers signed his contract and became Appreps.

Then, as suddenly as it had appeared, the Palanthir’s vision vanished. I blinked twice, and was back in the normal world and with the software company’s rep looking at me very strangely!

This experience naturally stayed with me for some time as I pondered it’s meaning. I know that some of the offerings from proposed Principals seemed so attractive. So easy, so cheap. No FSA to worry about (so to speak) if I just signed on that line. After all, I’m only small. And the FSA’s so big. And the guy at the seminar had such a genuine tone, and smiled as he told us all how wonderful life would be under their protection. Why, it would be like still living in the Shire!

But niggling away in the back of my mind was the thought that if I could use available technology properly my business would be constrained to operate within a fully compliant structure; sales process, maintain required records and audit trails, produce mandatory reports and even assist with our training and competence. I knew what I wanted in searching for a such a system, but always there was something missing from those I saw. Some would do one thing, but not another. Some had great innovative features, but missed out on basics. I didn’t think it was too much to ask to want something that was all singing and dancing. (See the list so far, and thanks Nicole for telling me about Mortgagestream, details of which will be added shortly).

After the presentation I really set about wondering why anyone would give up from 5% to 10% of their turnover just to have someone else do the same thing? I’m prepared to invest time and money to scrutinise the technology that’s out there, and research exactly what I need for compliance support, administration and sourcing etc. so that I can have the best of all worlds, and keep all my options open. Although I’m clear that the right route for us is direct regulation, I do appreciate that for some brokers the AR route may be the right choice. What ‘get’s my goat’ is the fact that some networks appear to be seeing $$$ signs in offering little more than a suite of services packaged around an off-the-shelf administration system (and throwing in free sourcing software to boot and Wow!, Gee, thanks!).

Of equal concern are some of the organisations offering support and compliance services for those intending to apply for direct regulation. For example I was really amused to find one company telling me that if I become directly authorised they could offer me the ability to deal with any lender and the ability to deal with any packager or club! (Duh! won’t I already have those things?) If they need to artificially bolster their list of benefits, perhaps they haven’t really got that much to offer. That’s like someone trying to sell snow to an eskimo!

So fellow brokers and consultants, wake up and smell the coffee! Beware the Palanthir’s vision. Sauron may not be as bad as Saruman! Let’s invest the time to do our homework properly. If you are going to become an AR (or a DA) then make sure you’ve got sound reasons why. And do check out carefully the real benefits, contractual terms and obligations of any organisation offering to hold your hand. Some brokers are going to get badly burned in the fires of Mount Doom over the next year. At worst, your entire business could be at risk if you make the wrong choice.

Over the next few posts, now that my juices are flowing on the subject, I’m going to share the homework I’ve done, the conclusions I’ve come to and the support organisations I’ve selected and my reasons why. These will, of course, be my personal views and findings. But you are welcome to post a comment with your thoughts whether you strongly agree or disagree. And tell us what you have decided and why.

This entry was posted on Monday, February 4th, 2008 at 2:46 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.