Any mortgage advisory firm active today will certainly know the facts when it comes to the market we are all operating in.
Huge drops in lending since the Credit Crunch mean that the number of advisory practices we had during those ‘boom years’ are now simply unsustainable. If your primary avenue was mortgages, and only mortgages, then the chances are you are no longer in business.
Last year alone saw 427 mortgage advice firms (both AR and DA) fall out of the market – this number could perhaps have changed their primary business away from mortgages but I suspect that most have either retired or gone to the wall.
Even with a healthy degree of support services available for firms the simple fact of life is that business has to be fought for, serviced and retained.
Every competitive advantage has to be utilised and maximised, plus every firm has to ensure they offer the client every conceivable financial service and product under the sun, not just the mortgage. If they’re unable to do this they are certainly not maximising their income from that client and the client themselves will probably feel under-serviced.
Business no longer simply walks through the office door however, if it does, then it can just as easily head for the exits if all advisory needs are not catered for. We know only too well that our AR firms do not just appreciate the compliance support they receive, or the exclusive products we can offer, or the higher commissions; what they also want is a network that can help them develop their business in a variety of areas. One hesitates to bring out the, ‘Teach a man to fish…’ saying but you can catch my drift.
What also interested Stonebridge when it came to the falling numbers of firms is the difference between those that were DA and those who opted to go down the AR route. As a percentage there was a 12% drop in DA numbers compared to just an 8% drop in ARs.
Can we take this to mean that those opting for the network route are less likely to fail and fall out of the market? It would be something of a ‘leap of faith’ conclusion to make, however, I suspect having a network on your side, supporting your business and developing the proposition and offering, is of great help to those firms who could otherwise have been forced to call it quits.
Perhaps those DA firms who feel isolated, and indeed those AR firms who feel under-supported, will be taking the time to weigh up some of the alternative network options available to them? In the end, it could mean the difference between survival or the firm simply becoming another statistic this time next year.
Richard Adams is managing director of Stonebridge Group
