A natural salesman, Richard Coulson brims with enthusiasm when discussing his desire to turn the newly formed Zurich Mortgage Network (ZMN) into the country’s largest mortgage distributor.
As director at ZMN, Coulson is responsible for implementing the company’s mortgage strategy across both ZMN and the Zurich Advice Network (ZAN).
Before embarking on a financial sales career, Coulson had been an associate schoolboy footballer with Sheffield United, and had spent three years teaching maths and PE in Newcastle. He also played in and coached the County Durham tennis team, but it was not enough. He turned to Allied Dunbar which offered a more promising career ladder and better wages – if he could sell. Coulson admits he was as “green as grass” when he arrived, and had to learn quickly being paid on a commission-only basis. Some 17 years on he has not left and thinks he is unlikely to do so. He says: “I can see no reason why I will not end my career here. Why would I change from an extremely successful worldwide organisation that has given me a massive position of responsibility?”
ZMN was launched in July to sit alongside ZAN and cater for the specific needs of the mortgage market. The new proposition has signed up 220 firms, comprising around 550 advisers, and Coulson has toured the length and breadth of the country speaking to lenders, distributors, and intermediaries. The overnight bag he brings to the interview bears testament to the time – normally Tuesday, Wednesday, and Thursday – he spends away from his wife and two children in Northumberland.
Despite a five o’clock start, a presentation given in the morning, meetings to attend in the afternoon and an evening function, Coulson does not look tired, and certainly gives no indication of weariness. He likes to be busy saying: “I choose to work at the pace I do because I thrive on it.”
ZMN was put together on the back of consultation with lending partners and intermediaries and aims to make offering mortgages and associated insurances as simple as possible for advisers. It has a panel of 17 lenders to deal with prime business, and seven more for sub-prime business. The sub-prime lenders are all accessed through ZMN’s partner packager Enterprise Home Loans. The whole sales process has been designed on an electronic platform going across ZMN’s mortgage, mortgage protection, general insurance and accident, sickness and unemployment product range.
Coulson says: “First you source the mortgage through our own sourcing system then, on the same system which cross populates, you can do the life or critical illness. Then you cross populate again to do buildings and contents and then again into ASU. So you have got all things on one system.”
For Zurich the mortgage market is a means to an end. Coulson comments: “We are an insurance company and we see the mortgage as the best possible door-opener for insurance.” Interest in ZMN has outstripped expectation. “It has dramatically exceeded what we thought the results would be between the July launch and the end of 2003 and we are already where we thought we would be by July 2004,” says Coulson.
Over the coming months Coulson thinks there will be a scramble between the networks to get members on board, and he believes many are going to come unstuck. He predicts there will be eight large networks left after regulation, while many of the smaller players will struggle. He says: “I do not think some of the smaller networks will survive because the costs – financial and time – of running a regulatory framework around a distribution network are large and the experience of doing that should not be taken for granted.”
Setting up an embryonic mortgage network is not for the faint-hearted and Coulson says that to stand up for compliance, prove capital adequacy and submit terms on management to the FSA is a massive job that some may have underestimated.
His pet hate at the moment is listening to the various network propositions pronouncing so emphatically how many members they are expecting to sign up. He explains: “If you read every advert or article on a mortgage network starting up that says we have got ‘x’ thousand members, and you add up all of these members then there are probably 150 000 people working in the mortgage industry because they are all claiming the same distribution. They have to in order to make people think they have economies of scale, but come Mortgage Day some of them are going to be very disappointed.”
Coulson is also worried that the numbers being touted will disrupt relations between lenders and distributors, making them suspicious of who to believe and dissolving standing relationships. Nonetheless, he is happy to see new and smaller players come into the market as they keep it vibrant and force the likes of ZMN to remain nimble and on its toes.
For an organisation the size of ZMN – it processed £15bn worth of mortgages last year and Coulson aims to double that next year – it is difficult to deliver on all service propositions. Coulson believes the electronic sales process will mean the volume can be handled without problems, and as long as good communication lines are in place, then everyone can realistically move towards a complete intermediary proposition.
He says: “The way you get it right is by having the whole organisation aligned and that is all through communication. Nothing is perfect and you will always get the odd blip, but if everybody is aligned then you have got a much better chance of having an overall proposition.”
Communication is a large part of what Coulson does, and things work best when lenders, intermediaries and distributors know exactly where the other is heading. As such, Coulson is regularly giving presentations to panel lenders, and intermediary firms, making sure everyone is kept in the loop, as well as listening in on reciprocal briefings.
It is also important for ZMN to keep an eye on future developments to avoid being outflanked and Coulson believes Europe may be the next hunting ground. He says: “I think ZMN will go European as the whole market opens up – you see it now with more and more people buying a second home. We are doing extensive research into what that will look like when it comes. If it does not come then no problem, but it is important to know. If the managers of the network know that you are not only keeping in touch with what is going on, but also looking out for the future then they feel more secure that they are in the right place.”
Coulson is proud that ZMN is at the forefront of the mortgage market, and has succeeded with the direct sales force model that so many others have had to scrap. He accepts the model has been altered hugely, and likens it to changing the engines mid-flight.
However, he believes it is now paying dividends and proves that face-to-face advice is the model favoured by the public. He says: “Regulation coming along is fantastic because it is getting back to knowing your client and offering face-to-face advice and that is the future. Businesses that are committed to that will survive.”
Coulson certainly expresses a passion for his work, but it is sidelined by his passion for Newcastle United. His claim to fame is that both Sir Bobby Robson and he have captained the same team – Langley Park Boys – although he did not divulge respective results.
Sport is again becoming an influence in Coulson’s life, and after many years away from the tennis court he has taken it back up after seeing a personal development coach.
He is quick to point out that he feels the balance in his life is right, but you feel he misses the raw competition that sport can provide and which the business world cannot truly replicate, much as it tries.
Coulson is very much a glass half-full person and, given the chance, he would say it was three quarters-full. But this is what he trades on and it has served him well.