Peter Brodnicki has been the chief executive of the Mortgage Advice Bureau (MAB) for the last four years, although he initially forged close links with the company during his time at Legal & General (L&G).
He explains: “When I ran the estate agency network at L&G, MAB was one of L&G’s top businesses and in my role I worked very closely with it. I was involved in looking at MAB’s business model and suggesting ways it could move that forward and it was at that point that a friendship and a relationship built up with the co-directors at that business.”
MAB has its roots in both the mortgage broking and estate agency sectors, and specialises in bringing the two together. As a franchise operation, it has more than 200 outlets covering most of England, with plans for further member companies to come into the business.
However, Brodnicki says it is not purely a numbers game and stresses MAB’s focus on businesses that want to work closely with the franchise, and grow the business they are doing. He says: “While a network is very arms length, we will look at everything for a member business from the recruitment of advisers to compliance, induction, training and all the ongoing support. This is done to beyond the minimum standard and we actually look to work with these businesses very closely and help them develop.”
He continues: “If you look at our administrative infrastructure for the amount of people we have taken on, it is very large, and we have invested very heavily in that area. We have taken slightly the opposite view to the network outlook, which is more of a numbers game. If we are going to invest more resources we have got to get a better than average result from those relationships otherwise they will not pay, and that is what we have done. This business has now got everything from advertising to public relations, and point of sale material to personalised websites. We will help people in negotiating contracts, organising cash flow, creating business plans and strategies for client reviews – everything they need to grow and manage their business. It is literally a template and we work with all these businesses to develop that model further.”
In going down this route, Brodnicki says MAB has gone against general market opinion, which has been towards minimising resources and maximising output. While the economics of such a strategy may make sense, they require the systems and processes to be water tight if they are going to work, and often too much can be asked of them.
There are questions over how networks are offering their proposition to the market as regulation approaches. Brodnicki says many are promising a lot, and questions if they will be able to deliver when the time comes. Such doubts gain weight when considering the recent announcements by Lifeboat and Simply Assured that their networks had gone into administration.
While MAB has its own ways of doing things, Brodnicki says this is not at the expense of new ideas, and being able to incorporate these has been one of the company’s strength. He says: “Every time someone joins us, we become stronger for it. One of our skills is to bring in the good ideas and pull them all together. We have come up with a lot of ideas ourselves, but some have also come to us. A lot of businesses out there can become very insular and whether you are a one-man band or you have 20 advisers working with you it is possible to become very blinkered and lose sight of what is going on.”
Although many companies say they benefit from this type of idea sharing, Brodnicki does not believe all of them get as much from it as they could. He says: “Because we put resource into looking at these ideas and how they might work, then we get more value from the exchange of these ideas.” Without this dedicated attention on exploring and incorporating new ways of approaching things, Brodnicki feels it is easy for old habits to remain unchanged.
Looking at future opportunities, Brodnicki believes the introduction of Home Information Packs (HIPs) is a big chance for advisers, and especially those based out of estate agents. As the first port of call for many in the house buying process, the estate agent has an opportunity, through its financial advisory arm to offer HIPs and so establish a strong client contact at an early stage in the process.
However, he is not the first to spot this, and believes if advisers do not provide the necessary service for HIPs they will be a threat to the estate agency model. He explains: “The estate agent has already got a prime position for getting to the mortgage client. The introduction of HIPs is an opportunity to increase that.
“However, they are also a potential threat because if you do not offer all the services to the customer in a professional manner, other people will ask why does the estate agent have to be the first port of call? They will then offer HIPs themselves and look to do deals with estate agents and financial advisers to provide the follow up services in the process.”
MAB has no plans to sit on its laurels, but Brodnicki says even it did not add new business to the franchise operation in the coming months, the overall company would still grow its volumes markedly. Elsewhere, MAB is looking to grow its revenue stream from overseas mortgages, and Brodnicki believes the deal it has just signed will help to that. Now all enquiries of this nature will be handed over to Conti Financial Services. Brodnicki says Conti was the natural choice in that market, and hopes the deal will see MAB do more business in that area through the new service.
In terms of competition, Brodnicki says MAB does not go head-to-head with any one rival, and that as a franchise operation spread around the country, it is really a case of competing with whoever is strong in the particular area the franchise is located. Brodnicki says: “It is difficult because we do not tend to go head-to-head with one company. We go up against the people that are good in the particular areas where we operate. It is not like us being a traditional network and knocking on the same doors with the same proposition.”
In terms of the products being sold through the MAB, Brodnicki says there has been a swing towards fixed rate products in recent months, but does not feel borrowers are feeling any real threat from increasing interest rates. He says: “We have seen a big rise in recent months in fixed rates which have gone from being 50% of our market to 85% to 90% of the products sold.”
He continues: “A lot of people are aware of the economic environment and even though we have seen a good few rate rises in a short space of time, I do not think people are panicking yet and that people were expecting it.”
In running his business, Brodnicki is not the type to seek the limelight, or to air his views and forward targets to the market from whichever pedestal he can find. This should not be taken for a lack of conviction in what he is doing or a lack of belief in the future for MAB, and is refreshing in such a competitive market where so many are jostling to be heard.
Brodnicki’s strength is in creating a cohesive nature to MAB which he hopes everybody else buys into, and can be seen through his emphasis on team ethics. He says: “If we can work together as a team and then work hard to keep that environment going once we become a bigger company then that will be the key. We do not need thousands of people, but we want to have leading entrepreneurial businesses around the country and we want to give clients access to us right across the UK.”
It has worked well in the past, and there seems no reason why the philosophy should not continue to deliver.
