Page 63 - Bridging & Commercial Magazine Issue 5
P. 63

 market, because you’re used to doing regulation, issuing terms of business, disclosing your fees and so on, generally speaking \[you’ll\] do the right job. It’s the fact that such a large part of this market is unregulated that you’ve got people who sit outside of that. CW: If you’ve got an unsophisticated borrower, a broker can quite easily say, ‘Right, this is really the only loan that suits you, this is the interest rate, 2% lender arrangement fee, obviously I don’t work for nothing so I’m going to charge you 1% as well.’ And the borrower has no idea that that broker is going to get paid 3% for that deal, which they may or may not think is value for money. CS: Chris, you mentioned the fact that you can ring up a peer or colleague in the market and ask them about a new lender. In general, what’s the relationship like between brokerages? Do you consider it to be quite a collaborative market? Or is it as competitive at broker level as it is between lenders? CW: People like to know what’s going on. Are you busy \[or not\]? Which lenders are you finding are giving the right service? But I guess it is a little bit cliquey. . . You’ ll get people who you’ll see as offering similar levels of service to yourself, perhaps a similar level of experience. But I think there is a lot of collaboration between brokers. I spend a lot of time meeting up on a regular basis with lenders, but also lawyers, accountants, receivers, administrators—all people that have some sort of impact on our industry. Quite regularly, I’ll get the heads-up from a lawyer or accountancy firm \[saying\], ‘Look, we’ve got someone that’s going to be new into the lending market, we think it’s going to be interesting for you to meet them.’ That sort of communication is essential. That’s how we learn; that’s our professional development. Everyone talks about it, but there are no industry qualifications, there is no go-to \[for\] how to be successful in the specialist finance market—you have to go out there and find it yourself. CS: Would you say that the broker market has grown at the same pace as the lender market? LS: This would be purely perception, but probably not. The lender market has exploded and most of the brokers I know are very busy and everybody’s trying to recruit more brokers. For me, getting that fresh blood into the industry is very important at this moment in time to cope with the increasing volumes that are available. CW: I think it has grown—and I think it has grown in pace with the increase in the number of lenders. Partly because lenders are a lot more visible in the public domain: you’ve got the P2P lenders advertising, ‘ You can borrow with us, you can lend with us, this is how you do it, it’s dead straightforward.’ You’ve got companies taking out adverts on TV, radio . . . I’m not sure it’s growing in a good way, necessarily. I think you’ve got a lot of people out there trying to be brokers because they’ve seen an advert ... we then get them saying, ‘We’ve told this particular client we could get \[them\] X amount of money within a certain period of time, this lender’s the only lender we know, they said they can’t do it, can you help us out?’ They’re probably people who shouldn’t have taken the deal on in the first place. CS: This is the crux of the conversation: the right type of growth. How do we do it properly? What roles do you play as incumbent brokers? What should the lending community be doing to ensure standards are kept up? LS: I have a few views on this. \[For\] actual brokers coming into the industry, who are the right sort of quality, there is a limited route in terms of how they become a mor tgage adviser. The traditional route is to get a mortgage qualification, such as CeMap, to work within a company, build up their competent adviser status \[doing\] general residential mortgages and, at some point, maybe a few years down the line, they’ll start to look at more specialist areas. That is quite a slow burner. Then you’ve got those who perhaps have actually got knowledge already of the industry, maybe they are surveyors or accountants \[who’ve\] been exposed to this \[market\] and they want to help people in the specialist market. Now, you don’t need a CeMap or mortgage qualification to do that, so it can be off-putting to some of these people to become mortgage advisers because their thought process is, ‘Right, I’ve got to get my CeMap qualification, then I’ve got to go through a competent adviser status before I can see the other side where the specialist \[space\] might be.’ We try to turn that around and do it a bit differently. We’ve already spoken about the fact that a large percentage of the specialist market doesn’t actually get regulated by the FCA. You’ve got your business B TLs, your commercials to limited companies ... areas like bridging and second charge business loans ... areas that are not regulated. Then you’ve got the other risk ... people \[saying\], ‘Ok, it’s not regulated, I don’t need to be FCA-authorised, I don’t need to have a qualification, so let’s just dive in, get a few clients and phone \[someone\] like Chris and say, “Right, can you help me with this deal?”’ It’s a combination of getting the right knowledge and training, being in a regulated environment and having certain practices that you follow as if you were regulated without actually having to go through a qualification which, maybe controversial, for most people, they \[won’t\] use the qualification part of it afterwards. Because that’s not what the job is: \[it’s\] the knowledge, researching the market, the analytics, understanding your client and which lender is going to help. CW: I agree with all of that. It’s not some sort of dark art that you can’t learn. Enness, over the last few years, have had a policy of taking people from outside the industry, mainly graduates or people they feel have got the right attributes and want to learn. S T: What are those attributes? CW: It’s more about the desire to be able to do it, rather than the ability. If you’ve got the desire, I think the rest will follow. LS: There does need to be a certain level of academic \[ability\] in there; it’s quite a mathematical/analytical industry. If you’re not good at some of those things, you will struggle with some of the others. Interview  S T: Structuring deals, mathematical aspect? is that the  61 LS: Yeah, it’s the analytical bit. \[Gathering\] information about \[a\] client: who are they? What are they looking to do? Where do they live? What are their ages? How much do they earn? What are they trying to buy? What does that property look like? Are there any quirks? \[Out of\] 150 lenders, because of this quirk, only 50 of them are going to lend to this client. And now, looking at the property, because of that quirk, only 20 of those are going to lend on this particular property. Now, I go into the next phase of analytics. Out of those 20, which is going to be the most cost-effective solution, taking into account their longer-term gains, as well. CW: The elements, when you’re broking a deal, are just so many. Once you’ve done  Sept/Oct 2019 

   61   62   63   64   65