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From music to mortgages

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  • 06/10/2003
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Edward Murray talks to Luke March, chief executive of the Mortgage Code Compliance Board

Negotiating recording contracts with Pink Floyd and the Rolling Stones is an unusual way to start a career that leads to a role heading up the Mortgage Code Compliance Board (MCCB), but then Luke March has never been one for structured career planning. An opportunist by nature, he has taken the best of what has come his way, and turned it into a good deal more by the time he has moved on.

A slight man, March’s salt-and-pepper hair crowns a face which belies his 52 years, and is in keeping with his Harry Potter-style glasses.

March has a legal background and graduated from Durham University with a degree in law and politics, before taking up a job with music giant EMI as a contracts administrator. An enviable job certainly, but the time-keeping of the musicians meant the candle was often burning at both ends, and it was not one for the long term.

March explains: “It was one of those jobs where you would end up having burn out by the time you were 30 due to the hours that were being worked.” However, he is quick to add: “It was enormous fun.”

The banking world may not be rock ‘n’ roll in many people’s eyes, but it was here that March turned his attentions to one of the most progressive of the companies operating in the retail market in 1980. March joined TSB in 1980 as a secretarial officer and was not involved in the banking operation, but rather a new venture to grow an insurance, investment and unit trust operation.

He says: “The switch was not as dry as you might think. It was a start-up operation and I think that was the key part of it – it was creating new business. There was this idea, you know, the link between the huge database TSB had in terms of the numbers and customers. It was the beginning of the cross-selling era and TSB led that in those days, and the conventional banks thought it was disgusting to do this sort of thing.”

A problem back then, which is also in March’s present focus, was how to maintain a high quality while conducting volume business. Many of the sales force were not from a financial background, and the problem was getting them to see a sale as a real match of customer needs to benefits.

March says: “The business developed rapidly in the 80s and one of the biggest issues was to control the quality as volume rose. People were coming in as salesmen who had not been in the financial services sector and it was like selling a product rather than selling what was suitable for individuals.”

Ensuring mortgage advisers are up to the job has been at the heart of the work March has done with the MCCB too, and he is delighted to be able to point to the 60,000 individuals who now hold recognised mortgage intermediary qualifications. When he joined the figure was nearer to 7,000, and he feels it speaks volumes not just for the work the MCCB has done, but also the willingness of the industry to take the changes on board.

Back at TSB, March was instrumental in the merger with Lloyd’s Bank before being headhunted into another corporate behemoth, British Telecom. At that time, regulator Don Cruickshank was on the warpath and competition and monopoly issues were at the fore for the telecom sector, and BT needed help. Having moved from the forward thinking TSB, in BT March found an organisation lacking in commercial zest and permeated with the processes and philosophies one would expect from a governmental department.

March stayed with BT for four years, deciding to leave before it entered what he describes as a period of “indecision and confusion.”

For an organisation like BT that had never faced competition, at a time when telecommunications were beginning to develop faster than ever before, it is not surprising BT had some major work to do before it could compete aggressively and effectively with its more modern competitors. March says: “It was doing outstanding work and the country could not operate without it, but even so, there was need for change.”

And so returning to the world of finance, March came to join the MCCB in 2000, again generating a fee for the headhunting community. It was the antithesis of the sprawling corporate giant from which he had come, and indeed the lack of structure in place when he arrived was not anything like he had experienced.

He says: “In terms of how I expected things to be here, I have to admit I had thought things would be more structured when I joined – I thought there might have been an organisation – and there was not.” However, it meant there was not the processes or culture to combat as had been the case at BT and the blank paper offered to March came as a tonic.

March was clear of the structure he wanted in place, and the priorities he needed to highlight. He already had an idea of the things that a regulatory body should be looking at, and certainly what issues would be of interest to the Financial Services Authority (FSA) if as he suspected “it was to become involved” at a later date.

He says: “It was a question of giving it that momentum, but most importantly we had to get the organisation in place and do it fast. We did not have much time and it was a question of putting out feelers and using all one’s contacts to get the team that we wanted. What is good is that the senior people have remained in place from the time we got them all together.”

March says communication in the early days of the MCCB was crucial and remains a priority today. In the first year, 20% of his time was spent speaking to journalists or writing for various publications, as he sought to clarify the MCCB’s agenda and how it would affect practitioners in the market. Although the MCCB was bringing a new framework to the market into which operators would have to fit, March says the support was encouraging, and he hopes the positive attitude with which his team have come to the task has helped grease the wheels.

He says: “The momentum in the industry for doing what we were going to do was massive. There are not many regulatory bodies that speak to their practitioners every month and certainly not in an educational way. We set out to create a partnership with the industry and it was not a case of ‘this is what we are going to do and you will comply with us’. The team consists of all practitioners, so we know the pressures under which people operate. Everything we did was practitioner focused and if it was not then there was a reason for it such as consumer protection.”

The job is not finished yet and there are many in the market that are still to engage with the regulatory bandwagon. Those who have not met the requirements of the MCCB have found it capable of putting them out of the market, and March is keen to dispel the analogy of a puppy and a hungry lion when comparing the MCCB and its FSA successor. March points to the 300 firms in the MCCB annual report who were removed from the approved list because they had no professional indemnity insurance as proof of the organisation’s potency.

He says: “The puppy analogy is a little unfortunate for us because it implies that we roll over and we don’t. We have all the powers we need to throw people out if they are really going to be objectionable.”

The real power of the MCCB has perhaps lain in its ability to avoid confrontation, rather than how it copes when problems arise. March says hundreds of intermediary firms have packed up and moved on, rather than implementing the necessary processes, or going through the disciplinary turnwheel. As a body, March says the MCCB’s approach has helped prevent many problems within the industry, by simply deterring new entrants. Of those applying to the MCCB for application forms, he says only around half are actually completed and returned.

Despite all its good work, time is running out for the MCCB and come 1 November 2004, it will cease to exist as an organisation. March is quick to praise his staff, and says both the FSA and the industry in general would be mad not to snap up the expertise and market knowledge they can offer. However, a daily worry is that many will leave early and cripple the MCCB as an effective body. For his own part, March says he is committed to seeing the job through and will be there at the end, despite what the headhunting industry may already have begun to drift under his nose.

Beyond that, he is either not sure or not telling, and although he seems nonchalant about how it all might work out, he is too smart to leave it completely to chance.

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