Phil Whitehouse: Blog

Wednesday 22nd February 2012

There was good news at the start of the year that the number of advisers leaving the market has slowed significantly. However, the numbers leaving the market are still cause for alarm.

The FSA recorded 5,193 directly authorised firms at the end of December, which meant that we lost around 200 over the course of the year. While this is half the number who left the year before, it is still a significant amount. DA firms where mortgages were their primary business were lower still – just 1,512 in number.

So what can we do about it and how can we reduce the number of brokers leaving the market?

Mortgage clubs are in the prime position to help and as a result we have upped our game to provide more wide-ranging support.

DA firms whose primary business was not mortgages were much more stable last year than those who relied primarily on mortgage business. So we feel it is the role of the mortgage club to help all our members to get to a situation where they choose how much mortgage business they do, so they have a firm foundation across a range of product areas.

However, surprisingly, brokers don’t often look to their mortgage club to get help and support, often overlooking the help that is within reaching distance and may help to keep you in business.

Access to lenders is a prime example. As lenders increasingly control their distribution, it can become harder and harder for smaller DA firms to access certain lenders’ products. Mortgage clubs work to give you the direct access to lenders that you might not otherwise be able to achieve. 

Because a club represents hundreds of brokers, we can negotiate the deals and the access that would be almost impossible as an individual.

Broadening out from mortgages, you need to look for a club that has a help-desk facility and BDMs that can offer you one-to-one help, who will visit you in your office, will look at your proposition and how you deal with your clients, who will share best practice and help you to come up with new sales ideas.

Networking with others in the same situation can be of especial value to smaller brokers, to exchange ideas and see how others are overcoming the challenges that you’re faced with. A good mortgage club should provide you with opportunities in your area, so you can meet with others in the same circumstances.

Training is another key area: make sure your club gives you access to specialist trainers who can help you to up your skill levels in areas that you have been unfamiliar with.

If, despite the training, cross-selling and dealing with completely new product areas is not your thing, one way of getting extra income is to find specialists who can look after your clients in the areas that you don’t – so you’ve done the fact-find, you’ve identified the need, but you don’t feel qualified to sell the necessary products. 

A good mortgage club should be able to put you in touch with someone whose specialist area is the one you can’t deal in, where you can refer your client and still receive a fee. 

It may well be that the club will set up a cross-referral system for you where you get the mortgage business and the other company deals with secured loans, for example.

Some brokers have actually been expanding in this market. So take advantage of your club to make sure your business model is right. 

Don’t let yourself be isolated. Mortgage clubs are here to help you and work on your behalf. 

Phil Whitehouse is head of TMA (The Mortgage Alliance)