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Comment: Meeting the needs of new money

Today’s high-net-worth individuals offer great mortgage opportunities

May saw the unveiling of The Sunday Times Rich List and, as always, it made for an intriguing read. One striking feature of this year’s list was the diverse way in which people had accumulated their wealth, whether through dating apps, video games, clothing or reality television.

“The landed gentry who dominated early editions of the Rich List have been overtaken by people prepared to take the risk of starting their own business, put in mammoth hours, and become wealthy by providing goods and services that people want to buy,” remarks Robert Watts, author of the report.

Such high-net-worth clients may have substantial wealth but, often, the more unconventional a client’s profession, the more complex are their mortgage needs.
Take Dan Middleton, for example; with his blue hair and tattoos, he is a world away from the stereotypical image one might associate with an HNW client yet, at 27 years old, he and wife Jemma have an estimated worth of £25m.

Middleton makes his money through advertising revenue derived from his YouTube videos, which means his monthly income is variable and dependent on YouTube viewership. As his profile in Rich List states: “Dan Middleton’s income balances precariously on top of a YouTube algorithm.”

Can you imagine applying a formulaic underwriting approach to such an income? It simply wouldn’t work – which is why so many HNW clients choose to use a private bank. Instead of a computer deciding a client’s mortgage fate, a team of
in-house private bankers and credit committee can personally assess each case on its merits and offer a bespoke solution.

Like Middleton, there is a growing number of entrepreneurs arriving on the HNW scene, many of whom do not fit some banks’ inflexible lending criteria.

This new wave of HNW individuals are also unlikely to hold any allegiance to a former family mortgage broker, as say a member of the landed gentry might. As such, they may seek out professional mortgage advice from their local intermediary, as even an internet millionaire is unlikely to have their complex mortgage needs met online.

While an HNW client’s mortgage needs may be complex, they should not be above the skillset of a professional broker. Therefore, if you do not already cater to such clients, now may be the time to invoke your own entrepreneurial spirit and embrace the HNW market.

Peter Izard, business development manager, Investec Private Bank

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