Do networks have what it takes for a start-up broker?
The prospect of starting up your own brokerage is a daunting one in the current climate. What with FSA regulation, IT and training just a small number of the issues that stand in your way, who would want to get tied up in so much red tape?
Then of course, there is the slightly important issue of getting the insurers on your side. Without agencies a broker cannot operate and it is widely felt that start-up brokers worry insurers, who generally opt to stay well clear until they are proven.
The number of brokers in the UK increased last year, when in previous years it had been falling. What does that tell you?
There have long been a number of companies dedicated to helping start-ups, but in recent years the broker networks have shown a lot more attention to the sector, and are now keener than ever to prove that they would be the perfect home for entrepreneurs who wish to have a crack at the broker market.
They promise to give people the ultimate start-up package, with the start-up in the majority of cases paying a fee for the privilege.
The appeal to start-ups is there, particularly as the networks offer them access to their panel of insurers and better commissions.
But there is a sticking point for start-ups who think they are creating their own independent broker. Getting in to the network is an achievement for any new broker, but staying there is another.
The networks have strict targets for start-ups to meet. To be accepted you have to provide an exceptional business plan, and often a book of business will help your cause.
With the network watching over you, the start-ups are under pressure to perform. Getting off the ground is tough in itself, but keeping the network bosses happy is a whole new challenge.
The networks have laid down their challenge and it is now a question of just how many will succeed.
