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The mortgage business gets street-wise

Q: What is g2m?

A: g2m offers a new concept in mortgage advice. Shops are located on the high street and provide customers with independent guidance through the range of mortgages available, helping them to find the best deal for them.

Franchisees guide the customer through all aspects of the house buying process, in addition to informing on other related financial products such as life cover, income and mortgage protection and household insurance. The emphasis is on giving professional advice rather than on selling products.

Q: Who is backing g2m?

A: g2m is a wholly owned subsidiary of life and pensions specialist, MGM Assurance, which has £1.5 billion of investment funds under management, and is Britain&#39s longest-registered company.

Q: Do you plan to expand further?

A: Underlining our strategy is a sustainable, five-year recruitment campaign. This will incorporate strict demographic criteria to provide face-to-face advice at g2m outlets at various locations throughout the UK. By the end of this year, we are due to open a further six franchises, with an ultimate target of 50 in five years&#39 time.

Q: How do you differ from, for example, mortgageforce and 1st Metropolitan Mortgage?

A: Firstly, we are independent mortgage advisers rather than panel-based. Secondly, our management services fee is 7.5% and this is less than one quarter of the amount charged by most of our competitors. Most importantly, all our franchisees operate from prime locations set close to the estate agents and banks. This gives them a clear profile and provides them with a &#39prospecting machine&#39 – the result of which is that the number of cases completed on a monthly basis far exceeds that of the average mortgage adviser in the UK.

Q: Who is the ideal franchisee?

A: g2m franchisees should have entrepreneurial spirit, business focus and a willingness to train to a high professional standard. They will also need the enthusiasm, drive and motivation to succeed in building their own business. Other requirements include communication and administration skills and an organised approach to their work.

Q: Do they need any professional qualifications?

A: Potential franchisees will need a proven record in the mortgage market. They will also need to be either already qualified, or registered for the professional adviser exams in order to meet the December 31 deadline for mortgage advisers.

Q: What are the costs involved?

A: The total set-up costs, which include start up and licence fees, can vary considerably depending on whether they already have suitable premises or need to acquire them. The costs of acquiring and completing the necessary shop can vary from about £40,000 for a small shop, up to £100,000.

As well as the initial costs they will pay a 7.5% fee on the total of the fees and commission they receive. All franchisees are also required to contribute 2.5% towards central marketing, funding national and regional marketing programmes promoting the g2m brand. This is in addition to their own local marketing programme which they will finance and develop.

Q: What do you offer franchisees?

A: Franchising brings instant access to a formula for marketing and delivering high quality services. Franchisees are not on their own, but will enjoy the support of an experienced organisation. The success rate of new franchised businesses has been significantly higher than small standalone businesses for many years.

Franchisees benefit from a distinctive brand with a strong professional image; a marketing system to bring customers through the door; complete training and support; the prospect of significant profits, the opportunity to expand your business, and the rights to your own territory. g2m offers the opportunity to earn an open-ended level of income which should grow each year.

Q: What support do you offer?

A: We offer franchisees a proven business operating system by way of a comprehensive support package. This includes training and development, a g2m mortgage desk, marketing support, electronic management system demographic profiling, mortgage code compliant operating procedures, corporate refit and design and access to corporate discounts.

Q: How many mortgages do you offer?

A: By using Mortgage Brain we are able to search through the whole market to find the most suitable mortgage for each of our customers. This, combined with a transparent commission structure, ensures that consumers are provided with quality mortgage advice – with the focus more on advising than on selling.

Q: What research has g2m conducted?

A: The research commissioned by g2m revealed overwhelming consumer confusion surrounding mortgage advice and that whilst consumers might browse the internet for mortgage information, they want face-to-face advice from professional mortgage advisers before they will commit to a mortgage.

The MORI research showed that, when looking for a mortgage, 74%, of people want to talk to someone who has access to all lenders, 16% want to see a recognised high street lender and 6% want someone who can advise on one lender&#39s products only.

Of the people questioned, 82% would choose face-to-face advice as their preferred method of securing a mortgage. Only 10% would feel confident arranging their mortgage over the phone, 4% on the internet and 2% through the post.

Q: Do you see the internet as a threat?

A: Our initial study showed that although many consumers research mortgages over the internet, very few (4%) convert this research to an actual purchase, as they still prefer the reassurance of having a face-to-face consultation. By creating an easy and relaxed physical environment, we believe that we have a formula that not only provides help to the consumer, but also offers true interaction not achievable over the internet.

Q: How did you react to the Treasury&#39s decision to regulate mortgage advice?

A: We welcome the Treasury&#39s decision to regulate the market. As part of our selection process all applicants are subject to a full financial services authority referencing procedure where financial, employment and trading references are required. We also have a compliant sales procedure and monitoring system in place. g2m will enter 2003 with only competent advisers, as all will have passed the relevant exams before the location opens.

g2m The Mortgage House

g2m The Mortgage House is a high-street-based mortgage shop franchise operation delivering professional independent mortgage advice.

g2m&#39s approach is based on research data highlighting a &#39niche&#39 in the mortgage marketplace.

Following the success of the two pilot franchises in Chelmsford and Portslade, g2m is to open franchises in Bridgend, Chatham and Whitley Bay over the next three months. The company hopes to have 50 franchises operating in five years&#39 time g2m&#39s headquarters (pictured above) is in Redhill.

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