From the very start of his career in the financial services industry, Carl Wright was always known as the youngest. He was the youngest salesman to be employed at his company, achieved the accolade of being the youngest top branch sales person and was quickly promoted to the position of sales manager, for which he was also the youngest. Then it was at 29 that he started his own mortgage intermediary firm, Cartel, which was last year recognised as one of the UK’s top 100 fastest growing private companies.
But if it was not for Wright’s gift of the gab, he may not be where he is today. In those days, most companies were not willing to take on anyone unless they were 21. During Wright’s final interview for his first job, the manager pointed out that he did not fit the company’s criteria and asked for a good reason why the rule should be broken. Wright says: “It was one of those moments where I saw my life passing before my eyes. To this day I cannot remember what I said but it was something along the lines of they would be stupid not to take me and, luckily, they gave me a chance. That was an important moment for me.”
As a young man, Wright claims he had no idea what direction to take in his life, which was quite a source of anxiety for his parents. He was born in South Yorkshire, where his father worked as a coal miner for 29 years before moving to Blackpool to run a small hotel when Wright was a boy. From a young age, Wright was expected to help in the family business. He says: “I think anyone who has grown up in a small family business would tell you the same – you work before school, after school, at weekends and on the holidays. Working becomes a habit and you get used to putting in the hours.”
While Wright had no idea what he wanted to do after leaving school, he did know he wanted to do things, rather than learn about them. He says: “I am not a religious person but I found myself praying, please God what is it I am going to do one day? Eventually I got into financial services at the age of about 20, selling pensions and life insurance.”
Essential elements
There are certain things a new recruit needs when starting a career in financial services, such as a suit and a car. Wright had an overdraft from college, was still living at home with his parents and did not even have a driver’s licence. He remembers being told by one of his colleagues that he was doomed to failure. The man held the view that clients would not take financial advice from someone half their age, but he was quickly shown to be wrong. Wright says: “That to me was a source of inspiration – it all came down to proving people wrong. It was a commission-only contract so my parents were utterly disgusted – they felt their son was worth a proper job, a proper income and a proper salary. It was a bit of a problem, but what happened was I got good very quickly. It was a steep learning curve.”
Wright started his own broker firm Cartel in 1997 with a vision about the future, which he believes was completely at odds with many others working in the industry.
He says: “Nobody would listen to me, nobody would agree with me, nobody would work with me to understand what I absolutely believed would be the case. I found the whole thing very strange. The funny thing is that has not changed. You will find a lot of industry commentators are still reluctant to buy into what I am saying. But the fact is if you look back over the past 12 months, everything I have said has happened.”
Wright makes no apologies for his strong views and in typical outspoken style claims there are many in the industry who either have their heads in the sand or are out of touch. He says: “My view is that the biggest threat to the market at this moment in time is the financial instability of intermediary businesses, individuals and companies. It is something no-one wants to talk about. I think if you look at the market, there are going to be a lot of casualties. As distribution declines, in terms of the number of people in the industry, it has a knock-on effect to lenders.”
Wright believes more lenders will become involved in the business of intermediaries and Cartel is ready for the change, with plans to tie to a single lender. He says it will be the lenders and intermediaries who are open to change that will thrive.
He adds: “Lenders are trying desperately to find the right strategy moving forward. In my opinion, there are so many lenders that do not have a strategy. Their strategy is to stay as they are, do what they have always done and build relationships with intermediaries. It is not as simple as that any more – they have got to get totally outside of the box with their thinking and make some major changes or they will simply not be around. I think in terms of moving forward there is going to be convergence. I think we are going to see more lenders getting involved with intermediaries because intermediaries clearly cannot survive financially.”
Wright says intermediaries who cling to the view that they should remain independent will lose out. He believes the idea of being independent is a myth and a failed sales technique. “Intermediaries are clearly emotionally attached to the tag of being independent. There are a lot of product providers out there who would love to have a single tie with a distribution company because they would have a guaranteed distribution of their products. If they are in a multi-tie environment or working with intermediaries who are independent, they cannot guarantee anything. That makes it less and less viable for the product provider and for the intermediaries.”
Wright says clients will receive better value from a broker who can distribute in volume, rather than an adviser who is independent. He believes a good example of his argument is supermarket chain Tesco, which recently revealed massive profits. He says: “Is that due to the fact it has 10 or 20 different types of beans on the shelf? Absolutely not. It has probably got one or two, and that is not independent distribution. But because of the volume it can distribute, it can dictate the price of distribution.”
Wright says most independent advisers do not use products from every provider but products from a core niche of providers. He says: “If that is the case, they should not tell the client they are independent. It is misleading at best and, unfortunately for the consumer and for the practitioners, the strategy is wrong. When I come out and say I am moving to a single lender and the reasons why, there will be people who will say it will not work. What they are basically saying is they have not got a clue – they do not understand.”
According to Wright, lenders are lining up to discuss the opportunity for a single-tie relationship with Cartel as they look for ways to create a bigger margin on the sale of their products.
He says: “I believe any intermediary that does not have its priority as being profitable is ready to go out of business. It is not about being independent or providing the best product to the consumer – it is about being profitable as a business. If an intermediary is not profitable as a business it cannot be independent, it is out of business. It cannot provide the customer with the best product because it is not there anymore.”
Wright’s view is clear cut and he has got some very simple ideas about how the future will unfold for him and is totally convinced that other companies will follow suit.
