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SPF directors Harris, Boles and King – the 20th birthday interview

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  • 06/06/2017
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London mortgage broker SPF Private Clients is celebrating its 20th birthday. Samantha Partington met with the three founding members to raise a glass to their success over the past two decades.

Birthdays affect people in different ways. Some mourn the loss of their youth seeing the advancement of age as a sign of slowing down, becoming less relevant – an end to their party years.

For Mark Harris, Mike Boles and Alex King, this milestone birthday marks anything but.

Their experience of setting up a mortgage brokerage in 1997 and staying profitable throughout the darkest days of the financial crisis, qualifies them as one of the most relevant intermediary firms in business. Building the workforce back up to nearly 150 after being forced to make cuts in 2009 and 2010 shows a company hitting its stride, rather than slowing to a stand still. The Management Buy Out (MBO) in 2011, is when the party started.

A radical idea

Situated in central London, with a turnover of £22.5m in 2016 and profits of £5m it is difficult to imagine Harris and Boles on the road, 20 years ago, presenting the ‘radical’ idea of offering high net worth mortgage advice to the Savills client network with King back at the office, mapping out the operation.

They started out in May 1997, a team of six, as the financial services arm of upmarket estate agent Savills. “High net worth estate agents hadn’t done this before, sold financial services to their clients,” says Harris. “It was a familiar model for the high street but to have a high net worth agent do it was pretty radical.”

“The myth is, that people buying through an upmarket estate agent don’t need a mortgage”

The obvious client bank to target was the Savills network which meant convincing the agents to introduce their clients to a new team of brokers. “It’s just not very Savills,” was a common objection.

As with most new ideas, it was met with resistance recalls Boles. But headway was made, and they gradually won over office after office with their proposition.

Preparation for choppy waters

At the peak of the market in 2007 and 2008, then operating under the name of Savills Private Finance the team had 25 offices and employed 280 people. Business was booming.

A wealth management division established in 1998 and a general insurance arm set up the year after, says King, marked the beginnings of diversification strategy. In 2004, Savills Private Finance set up an agriculture and international division followed by the acquisition of a business in the Channel Islands. King says the strategy was to ensure the brokerage was protected if one or more of its businesses encountered choppy waters.

This was a decision which proved insightful given the devastation waiting around the corner for the mortgage market.

As lenders chased volume, and evidence required to support a mortgage became increasingly scant – Harris says the industry went through a period of de-professionalisation. Mortgage brokers became order takers and lenders piled it high, securitised the loans and bundled it on.

“As a business, you do your planning. You factor in some upsides and some downsides. You would never have factored in what actually happened,” says Harris.

“No-one moves quickly enough to make the cuts and no-one cuts deep enough.”

They stayed afloat because of the support from the other divisions, and the necessary but difficult cuts to the company’s workforce and office network which had to be made.

Looking back now, from a position of economic stability, could they have done anything differently?

Boles says they should have cut harder and quicker, Harris agrees. “Despite buffering the losses being made in the mortgage division, with the other departments – as a management team you are in denial about the severity of the problem. No-one moves quickly enough to make the cuts and no-one cuts deep enough.

Career high point

By 2011, the business was down to 70 people after disposing of a business to MAB, which put them back in a position of strength and ready to face the high point of their careers. In the same year – the team collectively agreed that the business would be better sat outside the Savills Group. The decision to buy Savills Private Finance from the group was an amicable one with Savills continuing to be SPF’s most important client.

“brave with a rich uncle”

Without the need for private equity or third party debt – the team were free to breathe new life into the business.

Savills retained a share of 19.9% of the business which acted as safety net for the new venture.

“It was a brave move for us, but brave with a rich uncle. That gave me reassurance that Savills weren’t casting us off into the wilderness,” says Harris.

The name changed to SPF Private Clients to allow the company to garner introductions from other estate agents that may have been put off by dealing with brokers bearing the name of a competitor.

The MBO, says Boles, was his proudest moment, and the freedom has allowed all three directors to create the kind of company they would be happy working for. So what does that look like?

“It’s a company which treats its staff how we would want to be treated,” says Harris.

“Get the best specialists into the right teams and let them do their jobs, leave them to do what they do best” is King’s philosophy. Boles says keep as many of your management client facing as you can and remember to keep enjoying what you do. “We are a sociable company, and we enjoy a drink at the end of the day.”

So the 20th birthday celebration, could be in only one place as far as the SPF team were concerned – Pizza Express.

“It’s where we celebrated when we bought the company, and raised a glass to no longer being employees,” says Boles. So, a glass of beer and a pizza was the only choice this time too.

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