What type of adviser are you? What type of firm do you work within? What network or distribution partner do you choose to work with? Where do you secure your business from? How strong are those business relationships? Are you positioned optimally for the market as it is now, and what it might become in the future?
Those are even more pertinent questions right now – and probably are at any time – because today’s market is so significantly shifting and flowing, and if advisers are not flexible enough to accommodate those changes and demands, then they are likely to become isolated, which could be dangerous.
Why being a generalist can be advantageous in a dynamic market
This current market is one which, more than ever, requires a working knowledge, and active participation, across multiple different products and service areas. It goes without saying that if you are reliant on just one or two sources of income, then you are effectively leaving yourself open to a significant reduction in business if the demand/activity in those narrow specialisms declines.
For example, few advisers are likely to regard the purchase market right now as one that will deliver significant growth and unexpected prosperity. If you’re an adviser who specialises in purchase mortgage advice, or even specialises in other related specialist sectors such as new-build, later life lending, first-time buyers, then you may be foregoing significant income streams that are available from remortgages and product transfers plus the ancillary product opportunities those clients could benefit from.
We’re aware of a major player in the mortgage advice space whose purchase and remortgage mix currently runs at 25% / 75%, and this has moved from a 50%/50% split less than 12 months ago: a sign of the times but also an indication of the agility of that firm to cope admirably with a material reduction in the number of purchase cases while maintaining overall application volumes.
Navigating shifting market dynamics
Now, that’s a significant movement in business mix and, as mentioned, for advisers reliant on purchase business, if those advisers and firms are not deeply immersed in other sectors which are providing the bulk of UK transactions right now, then they are likely to find themselves, a) contemplating what to do next, and b) asking themselves how they can become more of a generalist in this market in order to optimise business results in light of current conditions.
Of course, there’s nothing to say that this will always be the lay of the land in terms of mortgage business mix, but I can think of no advisory business right now who would think they’re in a great place by being overly-reliant on purchase transactions or rely on the majority of their business emanating from estate agent introducers for instance, or solely targeting first-time buyers, for example.
Being a ‘generalist’ in this market is a positive, because it means advisers can cover the widest variety of client wants and needs and are not positioning themselves in one sector and hoping it might suddenly improve during the rest of the year.
As a network, our focus is on attracting generalist advisory firms, and there is an interesting parallel to be drawn here between ourselves and the broker firms themselves.
Let’s be blunt, brokers might be seeing the number of mortgage applications per adviser dipping recently – it might even be inevitable given the market we’re now in. However, in this environment, network recruitment continues to be hugely important, for us as a dedicated mortgager network, and for individual firms as well.
That’s because our success in delivering sector-leading growth in adviser numbers increases the number of cases that our members generate for lenders each month, and by growing adviser numbers we can help our firms grow their income per case. And that’s the same for new AR firms who join us. They can tap into the opportunities within the network they wouldn’t get elsewhere, to benefit from what they are not able to access as an individual/firm outside our umbrella.
The power of business relationships
We provide a host of sector-leading technology via our Revolution system, that can make advisers’ business lives easier, more efficient, with market expertise creating stickier leads/greater potential client contact, with business development on hand, with the ability to drill down into their activity and show them the opportunities they have, and potentially the ones some advisers tend to miss in the absence of processes and technology that we provide.
Plus, they also get the stability that comes with an independent organisation with significant amounts of resource and financial backing, which is here for the long haul and can be with broker firms for the long-term. And that certainty, stability and support should give our firms confidence that we’ll be here to help them to navigate this market and those to come.
In essence, advisers should be working across all mortgage market segments, aligning themselves to support organisations who invest in them and provide the support they need. They shouldn’t be frightened of expansion, even if the market feels different to recent years. The needs of customers will also continue to grow – advisers need to make sure they grow with them.
Rob Clifford is the Chief Executive of StonebridgeGet in touch to find out more >