“As a James Bond fanatic, as I still am now, I fancied a foreign office career,” Brightstar Financial’s chief executive officer Rob Jupp offers by way of his explanation to do a degree in public policy when he was 18.
As to how long a six foot seven James Bond – that’s Jupp’s height – would have lasted as a spy, he admits that if it had got to trench warfare he would have had his head blown off in a matter of minutes.
“I was more thinking more along the lines of the diplomatic service,” he says. “And in some respects, a career in specialist mortgages, with the emphasis on diplomacy, has not been too dis-similar.”
Jupp made a name for himself in the boom years for being an outspoken critic of the packaging sector but he says that getting on better with his industry peers has been a long running goal, albeit with mixed results.
He’s also had to deal with the total collapse of the specialist sector in 2008 and the impact this had on both his professional and personal life.
The carnage that resulted from the credit crunch in 2008 took out many of the leading lights of the packaging market, and the firm Jupp had spent most of the last decade building was no exception. Jupp’s joint venture with Personal Touch Financial Services, Personal Touch Packaging, which then morphed into Savills Lending Solutions, was finally permanently laid to rest in 2010.
In 2011 he returned to the market with another specialist lending firm, with the incredibly upbeat name of Brightstar Financial.
But with the mortgage market continuing to be overshadowed by a combination of economic bad news and lack of confidence, what has Jupp done differently second time round?
Despite Jupp giving Mortgage Strategy The Only Way Is Essex tour when going to interview him – Brightstar Financial’s offices are in Brentwood, Essex, home of the infamous Sugar Hut which fans of the TV show should know well – and the golden tan he swears is from a recent holiday, he is not a native-born Essexonian.
Brought up in Sussex, his parents were fish and chip shop owners who emphasised to him by example how important it was to get educated.
So he went to Birmingham University to do a three year degree in public policy. After the first year his dreams of being James Bond had pretty much evaporated, but when he graduated in 1992 with a 2.1 he was looking for employment in the middle of a major recession and an inhospitable jobs market.
Dreams of working at British Airways were dashed, and instead he wound up in Croydon working at a firm selling flights on Cefax for a year. It was while looking for a flat in 1993 at the Countrywide-owned estate agency chain Bairstow Eaves with his then girlfriend, now wife, that Jupp was first introduced to the world of mortgages.
“I began talking to a mortgage adviser in the branch and four weeks later I was a mortgage adviser for Countrywide,” he says. “The great thing about that first role was that they offered me a basic salary and a burgundy Astra which I thought was fantastic – although you could only get in one side because the passenger side was broken, like Bo and Luke’s car in the Dukes of Hazzard.”
Between 1994 and 1995 he was in the top 10 consultants at Countrywide in the UK, which led in 1996 to him being promoted to a regional manager role at Bairstow Eves in Basildon and then his first management role in South Buckinghamshire. He then took up positions in North Essex and Suffolk, before resigning in 1998 to start up his own brokerage, OFM.
OFM stood for Online Financial Management – but there was a problem.
“ We weren’t online and we didn’t do financial management though so stuck with OFM
instead,” he says.
However it branched out into self-build, buy-to-let, financial planning, and client retention was key, so by 2004 he says it had grown to be one of the top 50 firms by size in the UK.
It had also begun to offer packaging as well, but only for its own sales force – and it was this small division that led to his link up with Personal Touch Financial Services.
Contacted by a PTFS appointed representative as to whether OFM’s packaging division could work on a case for it, Jupp contacted PTFS to double check this was ok to package for this particular broker.
“PTFS invited us to speak with it and within two weeks we’d agreed a strategic partnership where OFM would become an AR of PTFS, with access to its packaging panel.” he says.
For OFM to offer to package for PTFS and then for it to counter offer with OFM joining PTFS as an AR sounds like a killer pitch – what made the network’s offer so special?
“They were the most dynamic business in the market at the time that we’d spoken to – full of enthusiasm,” he says. “By their own admission a bit rough and ready but new where they wanted to get.”
Then in mid-2005 the decision was made to launch Personal Touch Packaging as joint venture between OFM and PTFS. Things went so well, Jupp relinquished control of running OFM to manage PTP full time.
He looked at the existing packager model at that time and saw many issues – which he then vocalised in the press in a series of interviews.
“I said correspondent lending and onsite underwriting were all wrong,” he says. “Aggregation with packager groups was wrong – overnight I became the most unpopular man in lending.”
But looking back on it, especially with some of the negative elements of lending at that time which only came to light in later years, does he not take heart from the fact that some of his analysis was correct?
“From a personal perspective if I had that opportunity again I’d be a bit more polite and diplomatic,” he says.
“The industry was run largely by some good people and understood that just because they did things differently didn’t necessarily make them wrong and me right. I had to work hard to get back the respect of my peer group which was important to me.”
Engines cut out
Becoming a self-imposed pariah aside though, he unsurprisingly says the boom years were a blast, with the high point being the company’s conference held at a hotel in Barcelona in June 2007.
“I remember standing up at that conference and revealing that month we’d originated £100m worth of business that month,” he says.
The firm had gone from new start to market leader inside of a year and a half. With other packagers like Advantage selling out to US investment banks to become lenders, at that point he says it was just a question of who we would sell to and when.
“From a lender’s perspective we almost had the perfect model,” he says. “But as we know, not all perfect models are what they first appear.”
He was given prior warning in July 20087 by a friend that worked for a US investment bank that something massive was coming down the tracks and that to prepare Jupp needed to cut as many staff as he could.
He initially thought his friend had been over exaggerating – but then in September there was the run on Northern Rock and he was prompted to act.
“We knocked 30 per cent of our staff off in the first four weeks, before anyone else in our sector and arguably deeper,” he says.
Then at the end of 2007 with the second charge markets closed, sub-prime lenders no longer lending, the market looked in an even worse state as it moved into 2008, a year that Jupp describes as “the biggest and at times most soul destroying year of my life, my Annus horribilis”.
There are many rumours as to what led to the ultimate demise of PTP – in July 2008 it was recruiting for more BDMs.
What Jupp will say is that when PTP went wrong it was down to two things – market conditions and personality issues. PTFS and PTP he says were ultimately going in two different directions and with Jupp’s team of shareholders having the majority stake he then sought to move PTP to another firm.
“The bottom line was I would have dealt with the situation perhaps less confrontationally than I actually did,” he says.
So in September 2008 Savills Private Finance bought PTP outright, rebranding it Savills Lending Solutions.
The aim from Savills side was it to provide commercial mortgages, agricultural finance, international property – but still work in the non-conforming market.
Jupp headed up SLS and says that he had two great years with Mark Harris, head of Savills Private Finance and his team.
But four days after he joined Savills, Lehman Brothers collapsed and the whole market went into collapse.
“SPF stuck with that business for two years, they were really loyal to SLS,” he says.
“We had some soft winds. But SPF never got the value back from that business that it deserved to get.”
Two years on, with the market having failed to improve the decision was made to close SLS in August 2010 and Jupp’s entire team was made redundant.
Unsurprisingly being out of work came as a shock to Jupp. Like many people in a similar situation it was a difficult period for him.
“Initially I got some nice calls from people that were interested in working with me, but four weeks after I started my gardening leave, those areas of interest came to nothing, he says.
“I’d never been out of work before and all the personal humiliation of being out of work was there in black and white.”
He looked at his options and with a young family and mortgage he needed to find an income and fast.
Against the advice of almost everyone he spoke to he decided he’d have another crack at setting up his own firm again.
“I spoke to a small group of mentors and said this is what I’m thinking of doing. Almost universally all said don’t do it, you’re guaranteed to fail,” he says. “But I ignored what they said and went for it.
“I just felt this was unfinished business and felt that if I could get the right team, look at the right areas, and get the right business model I could make good income to protect my family.”
With Kit Thompson and Bradley Moore, both of whom had been involved in his previous firms they set up the firm. The brand agency they’d employed had come up with the name of Shine, a name he describes as “appalling” and too similar to the Take That song in a recent advert for the supermarket chain Morrisons. Instead he went for Brightstar Financial.
The team has now three distinct divisions – commercial, bridging and secured loans and specialist first charge. Relationship wise they have link ups with Mortgage Advice Bureau, which has a stake in the firm, and networks Intrinsic and Positive Solutions.
Commercial mortgages were not where they originally intended to do but after initially getting inquiries to source commercial deals they decided to cater to them.
And aptly for an organisation that’s been a strong advocate of using Twitter, the firm got one of its most important relationships via the social media site. A tweet from Saffron Building Society inviting Brightstar up to the mutual’s offices to talk about distributing its specialist prime products.
“I don’t want us to be another specialist distributor that delivers the same products – I want us to have products that no one else has,” he says.
On the subject of Twitter, the firm caused controversy in September last year when it received a warning from the FSA over a tweet that had been posted about a mortgage product his firm was offering from Saffron Building Society.
“The FSA was concerned this tweet could have been overstepping the line into offering advice, but it was clearly written in trade lingo and only aimed at brokers, not consumers,” Jupp told Mortgage Strategy at the time.
“The FSA conceded my point and I have no criticism of its decision to contact me, but Twitter is clearly a big issue with the regulator at the moment and advisers need to be aware that they could be overstepping the mark when they discuss products on Twitter.”
Jupp says that the firm had actually received a couple of letters from the regulatory who were a bit confused about what exactly Brightstar was doing – he says somebody had made a complaint about the firm’s activities to the FSA.
“The FSA was a bit confused about what we did and questioning whether we gave advice, which is easy to refute,” he says.
“I did a Freedom of Information Act request to try and find the source but under the whistle blower policy the FSA won’t confirm the source.
“But since we threatened legal action against the FSA that’s stopped, as it was taking far too much of my energy in protesting our total innocence.
“They were fine about it – they understood that someone somewhere, whether for commercial gain, was trying to cause trouble.”
So has the incident incident with the FSA changed how he now uses Twitter?
“It has,” he says. “You guys got wind of that and as a result all networks were minded of
what they put up on Twitter. So we’ve just got to be mindful that we don’t go over the line.
“I don’t use it to talk about specific products, specific relationships, we’ll do Tweets like, ‘Really interesting scheme coming on specialist first, B2B only, all interested advisers DM me’.
“We use Twitter to tempt and titillate but not to articulate specific deals.”
State of play
Unsurprisingly he’s bullish about the current state of the market.
He says he is actively involved in conversations with two lenders at the moment about bringing a non-conforming option that doesn’t currently exist in the market.
“But these will be a niche-of-a-niche type products and will only include a finite amount of borrowers that currently can’t do anything,” he says.
“The big win going forward is my view that some products we’re doing we’ll be large lender products in the future.
“These are just seeds. And if it’s got a good track record hopefully it will lead to more.
“I am excited, but that market back to 2007 will never happen. You will never get the number of owner occupiers that it was back in 2007. But you will have a lot of mortgage prisoners having their sales unlocked. “
Eyes not on the horizon
But with the anniversary of the collapse of Northern Rock last week it’s clearly been a tough time for many in the market. And Jupp argues that for now he’s happy to take each quarter at a time, rather than making any grand predictions about where the market will be in five years time.
“It was easy to predict the future in the good days because it was all about growth to get to one point, which was trade sale of the business.
“Now I don’t see in five years that happening to anyone in our peer group, including us. So it’s not even year segments, it’s micro managing your business on a quarterly basis, looking ahead to
the next three months and saying this where we’ll be, this is where we need to get to.”
CV Box: Rob Jupp
Date of birth: 27 July 1971
Education: 1984 – 1989 – Oakmeeds School , Burgess Hill, West Sussex
1989 – 1992 – University of Birmingham 2.1 in public policy making
1992 – 1993 worked for Lotus International selling flights
1993 – 1998 Countrywide – mortgage adviser for Bear Stearn eaves
1996 – Promoted to regional manager at Bairstow Eaves in Basildon, first management job in buckinghamshire
North Essex and Suffolk – with a team of advisers
1998 – resigned to start my own business – OFM Group – online
2006 PTP started, left day-to-day running of OFM.
2008 – 2010 PTP bought by Savills Private Finance, rebranded to Savills Lending Solutions.
August 2010 SLS closes
January 2011 – launches Brightstar Financial with fellow directors Kit Thompson and Bradley Moore.
I’m honest and don’t expect anyone to do something that I wouldn’t do myself.
I’m a season ticket holder at Brighton & Albion season ticket holder, I’ve done the three marathons – New York, Berlin and London – and I am
doing the London Triathlon in 2013.
Brighton Hove Albion 1979 to 1980 – our first year in top flight football and it’s the book I look at the most. And Stadium Yes – a
historical history of Brighton’s.
Favourite film: The Killing Fields
Mortgage: Bank of Ireland