I read the article ‘Will the Mortgage Credit Directive kill off the master broker?’ yesterday at 11.30am.
By 11.32am I had tweeted Mortgage Strategy asking if I could comment on it, and by 11.34am deputy editor Sam Barker had rung me and commissioned 500 words by 9am today.
Next time, I think I’ll just keep my mouth shut.
But, and here is the point, the article rattled my cage. Why ? Well we started a second charge master broker firm around three months ago and reading the headline ‘Will MCD kill off the master brokers?’ quite simply caused me to go looking for a cat to kick.
Thankfully I couldn’t find one, and to be honest with my back I daresay I would have come off second best.
That aside, I felt the need to respond on behalf of London Money Loans, but not on behalf of the second charge industry. I can’t, I don’t know others’ business model, motives and long term plans. But I do know ours.
Upon reflection, my answer to the question as to whether we are filing master brokers alongside dinosaurs, the dodo and Roy Hodgson is quite possibly yes – but not all of them. Post-MCD there will inevitably be collateral damage in the market in the same way the Retail Distribution Review saw off many IFAs and various stages of regulation have eroded many a business plan over time.
We believe this market is set to grow massively. Recent figures from the CML show that £433bn, yes that’s billion, of mortgages have rates that are under two per cent.
That’s 35 per cent of the market that may need to consider a second mortgage before we even get on to those with Interest Only debt or complex income scenarios.
We acknowledge that some brokers may go direct. One of our introducers did. The lender rejected it. We looked at it , repackaged it and got it agreed with the same lender. This is a new product for the majority of advisers and this time around we gave the broker a second bite of the cherry.
Not all will be so lucky. We also helped a broker design and copy write a newsletter to send to his clients to help generate second charge enquiries. He got two strong responses within 24 hours. These small actions are the differentiators that may add longevity as well as profitability to our business.
There is plenty of room in the second charge market for packagers and master brokers to not only survive but to thrive as well. I’ve been on the periphery of this market for the past few months and all the people I have met have been hard-working, honest and fun people to be around.
It is an exciting and challenging time to be involved in this industry but, and here is the warning, the fight didn’t end when everyone got to 21st March.
If you have read my previous articles you will see that I am not ashamed to throw in other people’s words in order to cover up the lack of depth in my own.
Who better then than to quote Winston Churchill who could easily have been talking about MCD when he said “ …this is not the end, nor the beginning of the end, it is, perhaps, the end of the beginning”.
Stay vigilant. Stay relevant. Stay trading.
Martin Stewart is director of London Money and London Money Loans