Speaking to two Jupps at once can feel like trying to surf a tidal wave of optimism. The duo are, of course, the chief executive and director of people development at Brightstar, as well as a husband-and-wife team that are the most public ambassadors for the firm.
Mortgage Strategy last interviewed the firm exactly two years ago. For any other company, that short timeframe would rule them out of profile interviews for a while. But Brightstar has undergone so many changes in that time that a catch-up is long overdue.
Brightstar meets Mortgage Strategy in its Billericay offices to talk about the future for the firm, answer its critics, discuss a possible sale and talk about its most important asset — its people.
This summer, Brightstar revived Private Label, a brand familiar to many as a packager founded by mortgage veteran Stephen Knight in 1990. It was known for launching clever mortgage products, was bought by GMAC in 1998 and was closed to new business in the early 2000s.
There is always a risk when launching a new operation, and this is compounded when bringing back a well-loved brand where many of the mortgage market’s current top brass worked in the past. But Rob Jupp says the market has given a warm welcome to the new Private Label, which has already recouped nine times the investment needed to resurrect it.
He says: “We’re delighted with the response that we’ve had. I’m not the architect of Private Label, I’m just the archeologist. I dug it up, and looked at it, and modernised it.”
Rob says the people in the market who remember the first Private Label have “genuine nostalgia” for the brand, but that appealing to the newer generation was done by product design.
He says: “Our challenge was to get them to understand its brand values without the romance of its heritage. The romantics get it, love it, want it; the ones that weren’t around back then want to buy from it.”
I’m not the architect of Private Label, I’m just the archeologist. I dug it up, and looked at it, and modernised it
Brightstar clearly has big ambitions for its new operation. Rob says: “I don’t want what we call ‘cheater’ products; the same as everything else in the market, just repriced. All our products have to be unique, exciting, have personality, and open up markets that can’t be otherwise supported post-MMR.”
He acknowledges that with time it will become more difficult to do this. But he adds: “While we can still innovate, it has value, and when we stop it has no value, so the challenge is on us and the lenders to make sure we continue to do that.”
The next step for Private Label is to bring back a credit repair product that Rob says has been absent from the market since 2007. He says the current crop of products have no guarantee that customers will be able to get a better mortgage rate at the end. There is also no way of knowing how many lenders will have an appetite for that sort of customer when they come off the product.
Rob says the firm is developing a product through Private Label that will give consumers a guaranteed cheaper rate if they pay their mortgage on time, also letting them refinance without penalty.
He says: “If they can’t get the product they want, they know they’ll get a cheaper mortgage by staying with the lender doing the credit repair. Let’s be clear – this is momentous.”
At the beginning of the year the lender also launched a campaign to help a group it calls the “credit crushed” — those rejected for mainstream lending.
The distributor launched a lobbying campaign and urged all stakeholders to work together and do more to stop the disenfranchisement of borrowers. But 10 months on the issue has stalled, Rob says, partly due to a merry-go-round of housing ministers and partly owing to a lack of industry support.
He says: “I think we took it as far as we were able to take it. We were underwhelmed by support we had from broker groups. It was a call to arms to say ‘let’s wake up’. We have a whole generation brought up in sub-standard housing that is not even second-world standard. The disappointment for me, every time we have an election, is that housing is so far down the list of priorities. In 2017 Britain, it’s an outrage.”
We have a whole generation brought up in sub-standard housing that is not even second-world standard
A year ago Brightstar launched Sirius Private Clients, its high-net-worth broking arm. Rob says Sirius now accounts for 30 per cent of Brightstar’s turnover, with average loan sizes of more than £3m. But he says that gaining headway in the saturated London market has been a hard slog.
He says: “Anyone who thinks they can open up an high-net-worth brand in London and make money instantly is deluded. You will lose money hand over fist for 18 months. Rent, staff, everything is so much more expensive. And there are not a lot of big game hunters. There are probably only 100 people in the country who do that high-net-worth stuff really well, and we have nine of them with us now.”
Understandably, many Mortgage Strategy readers best know Brightstar for its work as a distributor. But many may not know that, outside the mortgage world, Brightstar is well known for another reason – people development.
The UK private sector largely ignores this topic, particularly in the often cut-and-thrust world of financial services. But when she joined Brightstar in 2013, Clare Jupp began rolling out fresh ideas, inspired by her time in education and as a head teacher.
Now, Brightstar’s approach to people development is light years ahead of the market, underpinned by pairing family values with modern business practices. Clare says this approach not only creates happier, more motivated staff, but employees who are more productive and more likely to stay with the firm.
The holistic approach to people is also reflected in how the firm’s headquarters are laid out. Inspirational quotes grace the walls, while the staircases feature artwork detailing the firm’s progress.
Usain Bolt’s signed running shoe hangs on the wall of the staff canteen, but even this plays second fiddle to a whole wall given up to hundreds of photos of the Brightstar team at work (but mainly play).
The building is also remarkable for featuring a wellbeing room, where staff can go to get time alone from the hurly-burly of work, and a ‘greenhouse’ room, used for coaching and people development.
Before Brightstar staff join, they are encouraged to spend at least a day in the office to judge if it is a good cultural fit for them. Then they are assessed one-on-one by Clare to determine their personality and what makes them tick.
The outcome of that assessment affects factors such as where they are seated. Then Brightstar employees are nurtured and coached to develop their talents — hence the ‘greenhouse’ room given over to the practice.
Clare explains: “It goes back to the idea of us being a family. We genuinely care for people, and that is reciprocated.”
The hard work put in led to Brightstar’s people development being named the best in the world by Investors in People last year. But if anyone interprets all this to mean working at Brightstar is a bed of roses, you would be mistaken.
Rob says: “We don’t ever take our position for granted. If I see complacency, I just won’t have it. I am ruthless about that. The specialist market is a complicated, often uncompromising world.”
The Jupps say other mortgage firms are now beginning to sit up and pay attention to their approach to staff.
Rob says: “It could be down to simple economics. If your brand continues to be the primary brand in the specialist market, if we continue making more profit than our peers, our staff retention is almost nil and we continue growing our turnover year-in, year-out, what is there not to want to replicate? And if we say that all these things happen because of our investment in people, that is the biggest thing people can take from Brightstar.”
We don’t ever take our position for granted. If I see complacency, I just won’t have it
Brightstar is known for being proud of what it does and for having a certain swagger about its achievements. This bold approach, beloved by the trade press, draws flak from parts of the market. So how would the Jupps respond to those who say the firm bangs the drum too loudly about what it does?
Robustly, it turns out. Rob says: “If we don’t talk about the opportunities we offer, how will our partners find out? How can anyone not have the same passion? And isn’t it a very British illness, certainly in business, to look at anyone who is the market leader and criticise them because you’re not the market leader? That’s just natural.”
The Brightstar chief executive says the firm has worked hard to get where it is and is proud of it.
He says: “This business started with three of us in the worst lending environment in UK history, with no guarantee of anything except that if we didn’t do deals, we’d go bust. There was no god-given right for us to become the best in the marketplace at what we do. We created that.
“People can always not read what we write, unfollow us on social media. We don’t need people to agree with us, we believe in it and that’s all that matters. If people don’t agree, they are entitled to their opinion.”
Clare says: “People criticise us on social media about how we build the brand. But we are proud of it, and about sharing it. And you are what you say you are. It’s perception becoming reality.”
So what does the future hold for Brightstar? Clare says the firm will continue “building and developing people”.
She adds: “You have to keep taking a new look at the model. It is so exciting to keep adding layers to our people development strategy.”
The future might also hold a change of ownership for the firm. Last year Brightstar was approached by a private equity firm that wanted to buy the entire business. The investment would have transformed Brightstar into a distributor/lender, with £1bn to lend over five years.
Rob says the process lasted for six months, and the PE firm made four offers to buy. But while the deal initially got broad shareholder approval, eventually it was voted down.
He says: “It was really interesting, really flattering. But it just wasn’t the right time for us.”
But Rob says he remains open to offers in the future: “We expect to receive an opportunity that will change the lives of many of our stakeholders in the years to come.”
This month sees the market adapting to new Prudential Regulation Authority underwriting standards for buy-to-let mortgages for portfolio landlords, which came in on 30 September. The industry mood music before the changes was remarkably sombre, with predictions of capacity issues and extra work for brokers. Some believe many brokers will desert portfolio buy-to-let entirely. True to form, Rob is positive about the changes.
“You can’t fail to be optimistic when you’ve been in the mortgage industry for 30 years,” he explains. “There have been so many ‘this is the end of the earth’ scenarios before.”
A year ago, Brightstar split its residential and buy-to-let teams into two in preparation for the changes.
Jupp adds: “The view that brokers won’t want to do buy-to-let is utter nonsense. But there will be a small number of transactions that the average broker will not want to do after the PRA changes.
“So for Brightstar and other firms out there it’s a great opportunity. It’s a niche opportunity, but we operate in the niches, so that’s what we want.”
2011 – now: Brightstar CEO
2009 – 2011: Savillls director
2007 – 2009: Personal Touch Packaging managing director
1997 – 2007: OFM Group
Place of birth: Cuckfield, West Sussex
Hobbies: Rugby and cricket with my children, Brighton and Albion season ticket holder, travel
Music: I like a lot of cheesy dancefloor stuff and loud house music
Mortgage: Base rate tracker mortgage with OneSavings Bank.
Employment: 15 years in state education, headteacher
Place of birth: Purfleet, Essex
Hobbies: Travel, walking
Music: I’m a 70s disco chick!
Mortgage: As above