Q&A: The Adviser Alliance founders reveal in-depth plans for new venture

The Adviser Alliance launched last week as a rival to existing mortgage clubs, aiming to use advisers’ collective buying power to negotiate better deals with lenders.

TAA will be powered by existing club Brilliant Solutions.

Here, TAA director Martin Stewart and Brilliant Solutions managing director Matthew Arena reveal more about the new venture.

Stewart-Martin

Where does TAA fit in such a competitive space?

MA – TAA is the latest and the most modern. We target a specific sector of the market, disenfranchised brokers that do not feel they get what they want from their existing club.

It won’t be of interest to everybody, especially as we are asking for a small up front payment. It will certainly be valued by those that join though as well as the lenders on panel.

How many lenders are on board?

MA – It’s comprehensive, currently at 20 but likely to be more when we release the panel. We have contacted all of the lenders on the Brilliant Solutions panel and they are up to speed with the TAA.

Most lenders on the Brilliant panel do not need to take any actions for the first stage of this project and the few that do will have everything in place for launch.

The latest list of lenders will be available at www.adviser-alliance.co.uk as soon as it is confirmed. We are not taking any payments until we have the final list confirmed but we are processing applications and running new member checks as we speak.

Watch this space, the panel, like the TAA itself is set to grow and grow.

What would your message be to brokers already in clubs that might be interested in TAA?

MS – If you don’t feel as though you get value from the club and don’t feel valued by the club then it’s time to get together with likeminded brokers and truly be part of something that delivers for you, your business and your customers. Be part of more than ‘just’ a mortgage club.

I want to have a broker-only steering committee to set the agenda for the TAA and challenge us if we fail to deliver. There is innovation, creativity and determination within the broker community and we want to harness that.

I can see a bright future for us collectively but that we’ll never achieve individually. The TAA is much more than a mortgage club, I see it as an incubator for turning broker driven concepts into an industry reality, be part of it!

What are the next steps for the club, after launch?

MS – We will be looking at revitalising industry events. Too often these don’t deliver for brokers or lenders, it’s time for a change!

What has broker feedback been?

MS – Incredible. Many are fed up with the status quo and are supportive. Hundreds of brokers have registered interest, that says it all.

It won’t be for everybody, that’s the great thing about competition and different models, but we have found a gap in the market for brokers and lenders alike.

What makes it appealing to lenders?

MS – There are few businesses in the directly-authorised market that are looking to bring brokers together, raise standards and establish minimum standards for communication, events and due diligence.

There is also a desire to break-out from the current events and marketing merry-go-round and we are working with lenders to deliver something that addresses these issues. Many incumbents do not have the same incentive to change.

This is being done with Matthew Arena’s and Brilliant’s assistance and support which makes the proposition appealing to lenders, he understands their requirements, which is crucial.

The TAA may be a new idea and a new way of doing business, but it’s not being run by completely new business, so lenders and brokers get the best of both worlds.

Matthew, what was it about The Adviser Alliance proposition that drew you in?

MA – Martin was trashing mortgage clubs. I was drawn to his comments because where you see a disenfranchised customer there is opportunity, these are the gaps in the market.

That disenfranchisement was felt by a good number of brokers, but with TAA we are solving those problems in a way that brings brokers and lender together.

Has there been any change to the cost to brokers of this?

MS – There have been plenty of changes as this proposition has evolved from what was a bold idea to a tangible business that delivers for all.

I am delighted that the cost is now only £300 for six months rather than the £500 for 12 months previously considered.

This means that brokers don’t have to dig so deep and the TAA will be given a chance to prove itself within six months. Given the expense is tax deductible the broker should see a real return on their investment.

There has been some confusion about the 100 per cent proc fee pay-away, can you clarify this?

MA – When Martin started attacking the current mortgage club status quo, he was seeking to give 100 per cent of all club income to the broker. He was quite open about that.

Over the course of our discussions Martin has developed a greater understanding of the value that mortgage clubs have for lenders.

One hundred per cent is simply not sustainable for any participant, no matter how great brokers may think it is!

If brokers are prepared to use a low cost mortgage club in the most efficient way and are also prepared to commit then we are in a position to be able to guarantee the maximum possible day one (net) procuration fee and then add the most competitive profit share in addition to that.

What is the profit share and how will it work?

MA – Unlike others, who openly advertise profit share percentages, we have a lo-cost model and subscription income so we are able to deliver more than is advertised by any other business. The downfall of our proposition is that we cannot put a fixed percentage on it!

There is a minimum fee per month for running the service, retaining any sums we need to provide the marketing support and events programmes and the rest of the funds will be paid away, and paid away on a monthly basis.

It’s all subject to subscription numbers and lender constraints of course, but the concept of subscription aligned with a modern, efficient service delivery mean that TAA will offer brokers more than is currently available in the market and deliver it quickly.