The industry must deal with the broker shortage, the under-representation of women, the changes to buy-to-let and the outcome of the Brexit vote. Mortgage Strategy hears from TenetLime’s Gemma Harle
Reaching the top as a female in a male-dominated industry takes grit. However, when one hears how Gemma Harle handled being held up at gunpoint, one begins to understand why the glass ceiling was unlikely to keep her down.
Now managing director of network TenetLime, Harle had an interesting childhood. Her father was an engineer and the family lived for a time in Tasmania, travelling all the way back to the UK by boat.
Her career began with a role as a branch worker for Halifax, aged 19. “It wasn’t my choice to go into financial services,” she says. “It was my Dad saying ‘Get a job or go to university.’”
In the event, Harle made a good choice with her first job. “I loved it,” she says. “I absolutely loved it.”
After a stint at The Mortgage Corporation in London, Harle took advantage of a break between jobs to go travelling. She spent two years driving through Africa with friends in an old converted Bedford army truck.
“One of the guys was a mechanic,” she says. “We drove from England all the way down to South Africa – mainly through West Africa and then into Central African Republic, Kenya and Tanzania, and we got rid of the truck at the end.
“It was really poor, very diverse and quite corrupt in a lot of areas. We saw different animals and took in the culture. We slept alongside pygmies – we weren’t on the tourist trail.
“In Mali we got stopped and these guys had guns, although in hindsight they might not have been functional. They wanted money.
“I had trousers on and they made me go and put a skirt on because in those days that wasn’t allowed. At the time… you’re younger – you feel invincible.”
The ordeal lasted an entire day, she says. “They got us out of the van and searched it, but we had all our money and valuables well hidden because we had done the van conversion ourselves. They didn’t find anything and just went away, luckily – and we carried on.”
On return from her travels, Harle settled back into life in the UK and her financial services career. This took her from Legal & General Mortgage Services to Mortgage Trust – later bought by Paragon – and then to Mortgage Next, where she was made managing director in 2004 just as the industry was grappling with the start of mortgage regulation.
Delay in diversity
While there have been many changes during her years in the mortgage business, Harle thinks the drive towards greater diversity among those working in the sector is moving too slowly.
Firms must work much harder to attract new talent and become more representative, she says.
Interestingly, Tenet’s board consists mainly of females, unlike the boards of most, if not all, other companies in the mortgage sector. This occurred organically by appointing the best people for the job rather than through a deliberate attempt at positive discrimination, says Harle.
“[Our board] is rare and we still get comments that show it’s noticeable. When you are in this kind of situation, things get said, not in a horrible way, but men will say ‘We’re outnumbered here.’
“But if I’m sitting in a room with two women and four men, I wouldn’t even think about it.” It is not easy to achieve a better gender balance in the industry, she says.
“There is a bit of nervousness if it’s seen as a campaign. It’s almost like saying ‘We are different’ when what we’re actually trying to say is ‘We’re not any different; we should be treated the same.’
“Of course we all got there on our own merits. And we’re not saying that anybody’s been deliberately excluding women. But just what is it that we have got to change?”
Harle believes mortgage broking is an ideal career to pursue alongside raising a family.
“You’ve got flexibility around hours. If you’re responsible for your childcare, you can actually manage it quite well. You see customers, you need to be there when they want you, but equally you can manage your diary. It’s hard to understand why it’s so male dominated.”
The lack of females is most apparent in the most senior roles, she observes.
“I was speaking to a recruitment guy about why women do not get put into board positions as much as they should. His view was that most board positions aren’t advertised; they’re filled from within an existing network. And men are generally already in situ and their network is often predominantly male.”
Female representation is not the only recruitment challenge for the broking industry. Harle says advisers are “run ragged” because not enough new brokers are qualifying to keep up with the demand for mortgages.
Meanwhile, the industry is failing to present itself as an attractive option for young, career-minded individuals choosing their path in life.
Harle says most networks have tried running academies that offer free Cemap training for new starters. She adds, however: “You can take 20 people, put them through the programme and then be left with five. Because of the fallout rate, it’s not cost-effective.”
Individual adviser firms need to take up the mantle by welcoming and nurturing new starters, she suggests.
“Culturally, business owners tend to be salespeople and they need to adapt and realise the importance of mentoring, not just asking ‘How much business have you written today?’”
Anyone embarking on a career in broking must be on the ball and able to adapt quickly because regulation frequently reshapes the market. The latest major shift has come from the Government’s clampdown on the buy-to-let industry.
“We’ve got new banks coming into the lending space. Their business plans are based on buy-to-let. How is that going to pan out given the changes?” Harle asks.
“Professional landlords will find a way of adapting to it but, to the amateur landlord, it will be a big change. Some will end up stuck – so we will have mortgage prisoners in the buy-to-let space.”
However, experts question whether the Chancellor’s policies will have the desired effect in terms of helping first-time buyers.
Harle says: “I don’t really see how it will have that impact. There will be less available stock for renting. But the reason first-time buyers are struggling to get on the ladder… I don’t think that will change drastically.”
She doubts if there are credible figures to back up the Government’s hypothesis that such actions will help homebuyers.
“The stats they are looking at, how robust are they? How up to date are they? Does the Government actually understand how that market operates? They’re trying to solve a problem before they even understand it,” she warns.
Harle also questions whether it is helpful to demonise landlords. “Nobody likes landlords; there is a kind of stigma, an image. Everybody is quite happy for this market to be attacked without realising the underpinning consequences.”
But Harle thinks a particular piece of regulatory change has helped brokers enormously: the Mortgage Market Review.
She says: “Lenders had to adapt their systems, processes and culture in order to offer advice and it has been a leap too far for some of them. So they’re quite happy to allow brokers to do it because they’re experienced.
“The MMR recognised the value of advice, which has also helped consumers. Previously, they thought when walking into a branch of a bank or building society that they were actually getting advice. They didn’t know that they weren’t.”
While the MMR led to many positive changes, Harle is concerned about the plight of mortgage prisoners trapped on high standard variable rates because tighter affordability rules have made it difficult for them to remortgage.
She says: “They’re being held on SVRs by the lenders. They’re not getting access to competitive rates. That’s another piece of data that we’re trying to get hold of.
“The FCA will say borrowers are being served because it looks at the data for people arriving at lenders and how much of that converts. What it doesn’t know is how many customers have been told ‘Nobody will help you’. That data isn’t recorded anywhere and it’s quite key.
“Also, how many of them are moving onto products without having access to advice because lenders can do product transfers as execution only? I think all that data should be available but the only organisation that could put the pressure on to get it and call on that data is probably the FCA.”
Harle adds that the industry is still failing to address the difficulties faced by self-employed borrowers and contractors.
“Lenders are still very cautious about that market but I think they need to keep pace with what’s actually happening in society. Contracts used to be a small part of the picture because people didn’t want to contract but the self-employed market has grown and lenders are struggling to keep up with it.”
Many people now prefer to work on a self-employed basis because it is more flexible, she says, praising the mutual sector for its efforts to serve this sub-group of borrowers.
“Thank goodness for the middle-tier building society sector because they are the ones that seem to respond to those changes a lot quicker. And given building societies have a reputation for being archaic, it is ironic that they seem to be the ones that can bring the products to market. They’re absolutely risk-based, as opposed to the tick-box approach.”
Harle believes social shifts are shaping borrowing habits. She says: “The profile of the workforce is changing, but that links to the buy-to-let market and this question about first-time buyers and why they can’t buy. A lot of people don’t want to. They want to rent because they want to be nimble.”
And what about the big question on everyone’s lips at the moment – would a Brexit help or hinder the UK property market and the economy at large? (Mortgage Strategy went to press a few days before the referendum vote.)
“I think it’s a total unknown,” says Harle. “The only thing is, if we’re going to exit then it will be a disturbance.
“We don’t know how the markets are going to behave. Given that we are owned by Aegon, Aviva and Standard Life, what would it mean for those big corporations if we pulled out of Europe? What would they do? They need a European presence. It would be a disturbance.”
For Harle, a ‘Remain’ vote is the safer option. She says: “From a financial perspective we don’t need another shock.
“There are social issues probably more worthy of debate. The money that gets spent on the campaigns to achieve what? It’s so much money. I know that’s what you have to do in a democratic society but if we were to put it into education or healthcare it might make a difference.”
CV – Gemma Harle
BORN Crewe, 1964
EDUCATION Business school in Glasgow
March 2010: Managing director, TenetLime
2004-10: Managing director, Mortgage Next
1991-2004: Variety of roles, including head of new business, Mortgage Trust
1987-90: Underwriter, The Mortgage Corporation
1983-87: Branch worker, Halifax Building Society
HOBBIES Travelling, cycling, cooking badly and wine tasting – specifically Sancerre
FAVOURITE FILM Gone with the Wind
FAVOURITE BOOK Have just finished The Hundred Year Old Man who Climbed Out of the Window and Disappeared, by Jonas Jonasson, which was very entertaining
FAVOURITE BAND The Jam – my music tastes are stuck in the 1980s
MORTGAGE Nationwide – I have been with it for 20 years
SIGNIFICANT ACHIEVEMENT Backpacking all the way from the UK to South Africa in a converted Bedford army truck