MAB predicts survival of the flexible

There will be more business casualties among broker firms in the next two years, the Mortgage Advice Bureau warns.

The independent broker says that while 2005 might have been a tough year, 2006 will not be any easier. And by 2007, it says the market will be starkly divided between winners and losers.

How the market splits will depend on which brokers realise they need to evolve along with the changing market climate.

Peter Brodnicki, chief executive of MAB, says by 2007 the impact of Home Information Packs will severely test the financial viability of many advisers, especially if housing transactions fall as predicted.

MAB says that only those brokers who have additional income streams such as personal loans or conveyancing will survive. It also believes that, because of the changing dynamics of the income model for brokers, those who charge fees will be the most successful.

Indeed, analysis of the performance of MAB’s 250 franchise branches shows that the most successful and profitable advisers are those who charge fees.

Brodnicki adds: “The industry must evolve to survive. I think many people have underestimated how much the world is going to change. They thought Mortgage Day was the biggest challenge but we think the next two years are going to be far more demanding.

“Only those brokers with the foresight to adopt different ways of working will thrive. For individual advisers, this means being careful about which networks or businesses they choose to work with.”