Choosing the Right AR Network: Lessons from Two Independent Brokers
Eleven months. That’s how long, on average, it takes a broker to go from their first conversation with Momentum to launching their brokerage.
It might sound like a long time, but anyone who has seriously thought about starting their own business will understand why.
It’s a big decision, and it usually comes down to two hesitations: Will my clients follow me? And will I earn enough in the first year to get by?
At our October webinar, Momentum 101: Year One – The Reality, Pete White from White Choice and Mark Richardson from CDR Insurance shared their experiences of navigating those decisions.
Choosing between direct authorisation and the AR model
One of the first big decisions for Pete and Mark was how their businesses would be authorised.
Going directly authorised sounds like the ultimate independence, but setting it up was estimated to cost £100,000 to £125,000 or more, which simply wasn’t an option for either of them.
The Appointed Representative (AR) model was, and neither sees it as a compromise.
Pete, now five years in, describes his relationship with Momentum as a partnership rather than a constraint.
Mark, just four months in, points to the compliance backup as something you couldn’t replicate on your own.
Both still think of themselves as their own boss.
Two different approaches to winning clients
Our guests took quite different routes in terms of how they built their book.
Pete’s answer was local networking, above everything else.
He joined every local network he could and, through a personal connection, sponsored a cricket ground for very little money.
His one regret is not starting sooner, because once he did, the leads picked up sharply.
Mark’s early wins came from relationships he already had.
Clients came looking for him, including some he hadn’t spoken to in over ten years who were unhappy with the service they were getting elsewhere.
A basic Google presence brought in a handful of cold enquiries too.
How central broking support changes the day-to-day
A big part of what makes a small brokerage workable is what sits behind it.
At Momentum, a broking team of more than 60 people handles presentations and market placement, while the AR keeps the strategic say.
Both guests admitted that took some getting used to, but they quickly came to see it as a huge time-saver.
Not least because Momentum’s insurer relationships are often stronger than an individual broker’s own.
For Pete and Mark, having that expertise behind them meant more time to focus on their clients and growing their businesses.
Read the small print before choosing an AR network
If there was one warning from the webinar, it was about contracts.
Pete spoke to three other AR networks before choosing Momentum and nearly signed with one, until he realised its independence “wasn’t quite as independent as they were making out”.
The problems were large exit fees if he sold part of his book within a certain period, and long lock-in clauses.
His advice is to read every contract with a fine-tooth comb.
A solicitor can flag legal issues, but they can’t compare AR contracts like for like for you.
At Momentum, there are no admin fees, and the commission split is a percentage agreed one-to-one.
Non-compete terms are worth checking carefully too. Non-solicitation, non-dealing and geographical clauses all work differently, but they’re not necessarily insurmountable, especially with financial support potentially available while they run.
Two pieces of advice for brokers considering independence
Pete would tell you to speak to as many networks as you can, then build a detailed business plan.
Mark would say start with the conversation, so you can find out early whether the network is the right fit for you.
Different approaches, but the same underlying message: take the time to understand your options and choose the right support for the business you want to build.
Watch the full Momentum 101 conversation
Thinking about starting your own brokerage?
Hear Pete and Mark discuss their experiences, from choosing their AR network to winning their first clients and building confidence in their new businesses.
Watch Momentum 101: Year One – The Reality
Explore your options with Momentum
Whether you’re weighing up different AR networks or exploring the idea of running your own brokerage, we’re happy to talk through your plans.
