Flavin already does similar work on a one-to-one basis, but decided a community structure was needed to help brokers become better business owners.
The Owner’s Room will separate mortgage advice firm owners into two cohorts, founders and owners, with each categorised based on their business needs.
The Founder’s Room will include up to 20 sole traders, and the Owner’s Room will have up to 12 business owners who have already employed an adviser, targeting firms with 2-5 advisers.
Membership costs will be £99 for 12 months for the first 10 members of the sole traders group, the founders room, and £149 for the rest. Firms will be expected to have hired at least one adviser by the second year and progress to the owner’s room.
The owner’s room is £249 for the year.
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The first 10 members of each room will also have a say on who else becomes a member to allow collaboration and avoid potential animosity. Once each room reaches capacity, there will be a waiting list either for the next year or if someone leaves the programme.
Hoare said: “We want to get people that are like-minded and have similar businesses to learn from each other.”
Firms will be selected from different regions to ensure direct competitors are not in the same group. Meetings will be held twice per month, one for coaching and the second to resolve problems.
This will allow advisers to “spend half an hour only asking open-ended questions and actually trying to solve that problem, which will help everyone else in the room”, Flavin noted.
Flavin and Hoare have known each other for over a decade, and after a dinner where Flavin was talking about his clients considering becoming directly authorised (DA), Hoare realised that many of Flavin’s clients’ questions could not be accommodated by a mortgage network.
Hoare said: “For example: ‘I want to sell my business, or what do I do to get my business in place where I can sell. What should I be doing?’ That’s not a necessary network question because networks tend to do more of the product pool; how to transact more protection, how to keep in touch when product transfers are coming up.
“My idea was rather than do that, move into the business world to answer questions like: ‘Why is my business running so slowly?’ or ‘why have my leads dried up?’.”
Sharing problems safely
Hoare said when a broker had a problem, they struggled to discuss it with their business partner as “the partner worries that the business is going to collapse”.
He continued: “They can’t tell their network because the network thinks they’re a bigger risk, and they can’t tell their staff because the staff think they’re going to lose their jobs. There isn’t that community or engagement.”
Brokers tend to run into similar challenges and need to speak freely about them, Hoare added.
The “social media effect” amplifies this, Flavin said, as brokers compared themselves to others and felt like failures.
“They all think they’re the only ones with that problem,” he added.
Flavin said that at networking events or on social media, it became “all about bravado and I think that’s the trouble: [advisers are] never in a safe space where they can talk openly and trust the people around them that aren’t going to judge them”.
Flavin recently piloted the programme with 12 business owners who were “amazed at how common the problems they faced were”.
This included “30 minutes of open questioning, then an hour of solving the problem, and then I spoke for a bit, Neil spoke about buying a business and LV= presented on their general insurance model. They loved it because they said it’s the time with each other they value the most, because they don’t ever get time to speak to each other in a closed environment,” Flavin found.
This is why the numbers for the groups are restricted and lenders will not be invited to the problem-sharing sessions, so advisers can feel confident to speak about challenges without fear of being judged, recorded or reported.
Flavin said: “It’s a lonely life, and we want to give them somewhere they can go and sit down and comfortably talk. Out of the meetings, they’ll have their own WhatsApp group so they can share ideas or problems with confidence in the people around them.”
From broker to business owner
Hoare said some of the questions brokers had about running a business seemed quite simple, but this was expected as they did not have a business mindset.
He continued: “They say: ‘I can’t retain staff.’ Do you ever say thank you to them? ‘No.’ Well, how about pizza Friday?
“You gain more time by making your staff feel better about the job they’re doing, but they don’t think like that.”
Flavin said many business owners still had the mindset of a broker and judged their success on that metric: “As long as they’re out-writing everybody in the room, then they’re happy, but is that success?”
He said many business owners hit a plateau and did not know how to move forward because they had become “accidental business owners”.
“They were a broker and either became unemployed or decided to give it a go on their own. They’re still a great broker but know nothing about business. They don’t understand marketing sales, repeatable quality in operations, finance,” he added.
He said brokers studied CeMAP to advise but not how to become a business owner.
Overlooked by networks
Networks often hold events and invite someone from a large firm to talk about how they became successful, but Hoare said owners of smaller firms could not always relate.
When asked why networks, clubs and lenders had a blind spot around supporting smaller firms, Hoare said networks tended to favour bigger, better firms because it looked good.
When Flavin’s firm Zing Mortgages was an appointed representative (AR) of HLPartnership, the network would always invite them to corporate events because it “made the network look good”.
“The smaller guys tend to get neglected. They don’t feature on any lender business development manager (BDM) lists because lenders have got to be very focused on their BDM activity. They might go to an event, shake hands with smaller brokers, and put that down on the CRM system, but they won’t necessarily go and see them again,” Hoare said.
Hoare added that networks were an “interesting beast” as the main focus was compliance and controlling risk, and recruitment was centred on onboarding rather than assessment.
Hoare added: “There’s a lot of focus on making sure the broker does things right, Consumer Duty and the like, but that doesn’t necessarily fall into how the business is run.
“If a broker rings up and says, ‘Oh, I’m a bit short on cash this year,’ they go, ‘Well, let’s look at your cash flow and let’s work out how to get more, how to get better conversion rates’. They jump into: ‘Oh, there’s a risk there. We might need to move you on to non-indemnity, or there’s some change in the commercial terms’.”
Flavin said smaller firms could be challenging for networks, as it was easier to manage a firm of 10 advisers from a compliance perspective, rather than 10 single-adviser firms.
Also, it is hard to get business support from a network or a BDM as they are in employed roles themselves, Flavin said, but he found that during the pilot programme, advisers preferred speaking to their peers.
