After a brief introduction, a participant revealed that he has always generated business through local contacts, which means building up relationships with local accountants and solicitors.
He said that, due to the nature of taking over from an existing business 18 months or so ago, at the moment his business is focused on a bit of everything.
He added: “We’ve seen a big influx of expats as well as older clients. But something I’ve noticed in the last six months or so is the return of retention clients, which is having an impact on our average case value.”
However, one broker said that the product transfer market is a big thing on everybody’s mind, as more and more lenders are working their client base earlier.
A participant revealed the importance of writing to customers three months in advance, whereas another said that it is best to keep in touch with them six months before their mortgage is due.
One broker said that being supported by a digital process may be helpful, aimed at sending clients letters followed up by emails and phone calls during the six months.
He added: “So, if they haven’t been in touch, it’s pretty clear that they don’t want to deal with us.”
However, a participant said that he works almost entirely on referral.
“It is a long purchase now that we seem to get referred, it’s fairly excruciating. So they’ve become customers for life,” he added.
Another broker said: “One thing that we’ve noticed is that we’ve now started contacting our customers annually when the first year anniversary comes up with just a quick phone call, and then from that, you’ll get a referral.”
Realising technology efficiencies
During the debate, brokers also shared their point of view about technology investment at a firm-level, such as robo advice.
One broker said it may be a threat to everyone’s business, whereas another thinks that it is not.
Another participant said that the limiting factor with robo advice is adoption by the consumer.
He added: “The customers we deal with right now are not quite ready for that yet. But guess what, the generation that’s coming up are.
“As a broker, I don’t think you need to spend hundreds of thousands. We have 20-odd advisers and we run on three admins, whereas some of our competitors have one administrator to one adviser and that’s because they use technology to automate as much as possible.”
Another attendee said that advisers are far too busy to manage all those leads effectively.
He added: “So, it would be beneficial trying to make the most of the opportunities as they come through, whether they are new leads or whether they are renewals, because actually I would say we only manage to convert 70% of renewals.”
In regards to technology replacing admin staff, a broker revealed that to make a saving to compete in tomorrow’s world, it is essential to realise the efficiency that technology will enable.
He added: “I think the back office is where savings exist. We have looked at it, we’ve invested in a new Client Relationship Management (CRM) tool, but we’re not going to realise the benefit in under a year. However, in a year’s time, I think we’ll need very few administrators.”
Relationship with builders
A broker pointed out how hard it is to forge and strengthen relationships with builders, as they seem to have their preferred brokers.
Another participant revealed that there is a builder that takes a £60 fee per case to run what is essentially the conveyancing system that the developer uses to get updates on the customer.
This means that the broker pays £60 as a fee and generally the builder will not allow the broker to charge this broker fee to the customer.
He added: “There is another developer, who shall be nameless, who essentially gets its brokers to bid on an annual basis, on a per case basis, to donate money to their charitable foundation, which they then use in the national press to say how much they are donating to charity when actually it comes from the brokers and other key stakeholders in the supply chain.”
Some brokers also said they experienced some problems with a government agencies in the new build purchase administration process.
A broker said the current housing transaction slowdown overall suggests people are working harder to pay mortgages down, rather than buying new properties.
However, another participant said that a lot of his landlords are investing in cheaper and smaller properties. Due to the HMO licence changes, he has seen a lot of clients with pots of money still to invest.
He added: “So, rather than being able to save the second home stamp duty, they are trying to save on the basic stamp duty element. So properties around £125,000 – £140,000 rather than £250,000 – £300,000 and saving a couple of thousand in stamp duty there.”
Another participant said that there are more people wanting to sell rather than retain their properties, as they cannot afford the additional second home stamp duty hit.
“I have got a client who is saving £120,000 on second home stamp duty because he’s had to sell. But then I’ve had discussions about selling into your own limited company in order to avoid the stamp duty on the larger up-size that you do later on. And basically tricks to avoid having to pay it,” he added.
Over the next two years, brokers are expecting that lenders will update their systems and at the same time their entire platforms, making their product transfers easier and quicker for clients.
Another broker highlighted that he does not want the job to be too easy, but it is essential to have confidence in dealing with a new system.
“I think in some ways with all the system changes, the easier product transfers are, the easier it is for clients to do the product change themselves, the quicker everything is, the less value that we provide or display,” he concluded.
Melvin Parker, CMME
Taj Kang, CMME
Chris Schutrups, The Mortgage Hut
Cliff Lee, The Mortgage Hut
Jon Hatfield, John Charcol
Alex Taylor, AT Mortgages
Chris Blunt, AT Mortgages
Marcus Beech, Your Finance
Tim Harrison, Harrison Grey Financial Services
Louise Gray, Harrison Grey Financial Services
Kat Toomer, John Charcol
Accord Mortgages – sponsors
Ellie Tovey, Accord Mortgages
Alan Luther, Accord Mortgages
Mortgage Solutions – hosts
Lana Clements, Mortgage Solutions
Oonagh Sheehan , Mortgage Solutions
Danielle Dennis, Mortgage Solutions
Antonia Di Lorenzo, Mortgage Solutions