Franchise mortgage advice network The Money Group has landed regulatory approval to house appointed representative (AR) broker firms under its brand umbrella.
TMG has historically required all its applicants to be directly authorised (DA). But with the addition of its AR model, firms don’t have to secure rigorous regulatory approval to be a part of the network.
The new licence will “help control a significant spike in recruitment enquiries”, TMG said in an announcement released today (September 13).
In the next 12 months, TMG anticipates a doubling of its around 100 broker headcount, helped by about 25 AR businesses it plans to take on.
Dave Corbett, TMG’s recruitment and brand development director, said: “This network enables us to deliver tailor made offerings for firms who prefer being part of a network and it helps us facilitate that transfer without disrupting their income or the serviceability of their clients.
“This will be an exclusive network with [a] minimum entry level and specifically for firms that we believe can help deliver significant growth.”
Under its existing business model, called ‘TMG Direct’, the firm employs individual advisers, trains them up, and then releases them to manage their own businesses under a DA model. When these individuals are ready to exit their businesses, TMG steps in to buy them back.
Having set itself the aim of generating £2.5m in annual revenue from its branded partners earlier this year, the minimum entry level for new firms and advisers to join TMG's existing model is £250,000 in annual revenue.
As well as its AR and DA revenue streams, TMG also charges a 10 per cent franchise fee, and has set up TMG’s mortgage club - or ‘TMG Club’ - which is set to deal with specialist lending options, such as bridging and commercial finance.
In August, Martin Stewart - another of TMG’s directors - told FTAdviser the group’s growth project “is about creating a legacy”.
“We want to be able to leave something behind which lasts for 100 years. There are really good business people in this industry, but they’re stuck being business writers. If we remove these barriers, multi-adviser businesses will scale much quicker,” he said.