View more on these topics

Three-card trick for brokers’ business

It’s clear that a lack of liquidity, slowing house prices and tightening criteria will be defining characteristics of the market this year.

In this light, brokers should examine their business models to ensure they’re sustainable and there are three crucial factors they should bear in mind.

First, regulation. The Financial Services Authority has made it clear that firms can’t slip under its radar so businesses of all sizes must ensure they have compliant sales processes in place.

Some commentators have suggested that directly authorised brokers were given a false impression on Mortgage Day that the regulator wouldn’t be interested in small firms. The FSA has emphasised that this is not the case.

Second, costs. While all businesses should constantly review their expenditure, when times are good firms tend to get into bad habits and allow fat to build up on their structures. In today’s harsh market conditions they have to watch their weight.

Towards the end of 2007 and into this year we’ve seen a number of big brokerages cutting costs. Of course, it’s more difficult for one or two-man band firms to slash their expenditure without trading unsafely.

Under these circumstances, small businesses can join up with other local firms to benefit from economies of scale or consider the network model.

Networks will pay for small firms’ professional indemnity insurance, offer higher proc fees and reduce their administrative burden and regulatory costs.

This often provides a double benefit, not only reducing expenditure but allowing brokers to do what they do best – writing business. And finally, support. It was becoming clear last year that both appointed representative and DA brokers were looking for support as well as the financial protection offered by mortgage clubs and networks.

This can come in many forms, including client management and back office technology, remote access training, seminars on business generation and marketing, plus compliance and help desk support.

Clearly there are other considerations but I believe brokers scrutinising their business models should put these factors at the top of their checklists.


LeadPoint reveals debt lead demand rise

LeadPoint has revealed it is now trading 200 debt leads every day.The trading exchange platform says it has experienced a steady increase in demand for individual voluntary arrangements and debt leads after launching into the sector in January.Nick Chapman, managing director of LeadPoint, says: “With the current market conditions, brokers need to diversify into new […]

Pressure to axe ERCs for long-term deals

The government is urging lenders to consider alternatives to early repayment charges to encourage the take-up of long-term fixed rate deals.A Treasury report unveiled in last week’s Budget, entitled Housing finance review: analysis and proposals, blames ERCs for low consumer demand for long-term products.It states: “Lenders have scope to manage the pre-payment risks associated with […]

Mutual urges owners to shelter from storms

The Cheshire is urging home owners to check their insurance cover is comprehensive in light of the storms hitting the UK.Last week, the Met Office issued se-vere weather warnings and winds of up to 80mph battered the country.The Cheshire also advises home owners to check their roofs for broken tiles that could have been dislodged […]

Orbiter is flexible on applications

Orbiter, the new company comprising Oppono, TFC Homeloans, TFC Commercial, Home Estate Agency, QPAC and Mortgage Branding, has pledged to offer brokers the chance to submit applications either directly or via packagers.

How to cut mortgage fraud risk

Recent figures from Financial Fraud Action UK revealed a financial scam was committed, on average, every 15 seconds during the first six months of 2016, says Roy Armitage, head of credit at Lendinvest. That represents a 53 per cent rise year-on-year, with these scams coming in all shapes and sizes. Furthermore, a staggering 56 per cent of […]


News and expert analysis straight to your inbox

Sign up