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Why your grand plans could be unnecessary
An oft-repeated phrase in the financial services industry often attached to intermediaries goes along the lines of: “Always do what you’ve always done and you’ll always get what you’ve always got.”
There is an element of truth to this; however, it is predicated on one major element – the market – also staying the same.
With the mortgage sector a third of what it was in 2006/07, a broker that has continued to work in the same way since then will have likely seen their results get increasingly worse with each year, not stay the same.
In an ever-changing market, intermediaries have needed to adjust and explore other avenues, perhaps to even get anywhere near to the results of previous years.
The message of change is one we have been pushing at our AR firms’ regional meetings. Not wholesale change or change for change’s sake, but small, incremental developments that taken as a whole can add up to so much more.
This is true for business level expectations. The AR firms that have embraced change successfully are probably back to where they were in 2007. Those that haven’t evolved are likely to be at least 30% down on four years ago.
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It may seem that that have all have taken a backward step, but, given the market, this is not the case at all.
Consider one of our biggest AR firms. A few years ago it was almost entirely dedicated to the remortgage market and making a considerable go of it.
However, it would have been foolish for it to continue putting all its resources to this type of business, given the state of the remortgage market over the last 18 to 24 months. As such, it has refocused on other, more profitable areas, notably protection and new build.
It didn’t move wholesale towards these areas and it didn’t neglect potential remortgage business. Instead, the firm shifted some resource and investment into the new areas and, using the same types of skills, carved out a quality operation.
As we motor into a new year, firm owners might be thinking about a major restructuring of their business – this type of overhaul is often unnecessary.
Making small changes of direction and using skills gained in one area somewhere else could make all the difference.
Fundamentally, if the firm is already good at what it does, then the biggest challenge will be in recognising where the opportunities lie and changing the business to meet them.
Richard Adams is managing director of Stonebridge Group