Poll
London Money: Industry needs to adopt a new approach
I hadn’t planned to march on Downing Street with pitchforks and wicker torches, although to those brokers that turned up at my office dressed like that, I thank you for your early commitment.
What the lending industry needs – and I use that term to ensure we cover both first and second charges – is a new approach. As a broker, I have had to evolve over the past 20 years, otherwise I’d have quickly gone the way of the diplodocus. Likewise, lenders have had to evolve their business model, or they would have gone the way of Bradford & Bingley.
But there are areas which have not evolved. Principally, how we, as the advisers, are perceived, treated and, above all, valued by those organisations we generate business for.
It is this part of the industry where I think we need to adopt a new approach.
You see we, the broker, are like the great Victorian explorers from the days of yore – fearless, inquisitive and determined. We go and find the source of the Nile (new clients) every single day. We deal with the dangers this brings: aborted work, difficult times, restricted cash flows, not to mention regulation and competition.
And what happens when we get back to civilisation with the bounty? Others swoop to dictate terms and feed off the goods we have delivered.
Here’s what I would like to see happen…
When that broker finds that client and delivers them, nicely packaged, to lenders, I don’t want to hear: “Well done, you can have this, you can have that, but you can’t have the other, so take it or leave it.” What I would like to hear instead are questions like: “Tell me how you found that client?”, “What problems did you incur?”, “What made them engage at this particular time?”, “What could we have done to make that easier for you or them?”
My fellow director, Scott Thorpe, has had a great idea how this can start to be addressed within the second charge mortgage arena. He suggests a small product levy of between £25 and £50 on each advised second charge sale. Assuming there are on average 1,300 sales per month, you can quickly see how a very large and sustainable fund could be acquired that could then be used to educate, liaise and support the broking community. Trust me, by helping the broker we will be helping ourselves and the wider industry as a whole.
I am fortunate in that I am at heart a broker, but now also a packager for others. It is fair to say that my eyes have been opened to how the seconds industry has been run so far. I have also wanted to gouge those eyes out having witnessed some of the past and current practices within the industry. If I, as a broker, am looking agog at what I am seeing and feeling disengaged as a result, I can guarantee you one thing: hundreds of others are feeling the same. This is one of the key reasons why growth within the market has stalled. We are shouting when we should be listening.
I’ll leave you with the thought that revolutions don’t just happen, they are caused.
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