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Brokers must increase productivity to tackle mortgage recovery – L&G

by: Duncan Crocker
  • 20/08/2013
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Brokers must increase productivity to tackle mortgage recovery – L&G
It has been a pretty tough few years for mortgage and protection advisory businesses... and for networks.

There have been many casualties along the way and the numbers of mortgage advisers are estimated to have dropped from around 30,000 at the peak in 2007 to perhaps only 10,000 active now.

Businesses have had to control their costs to survive. They have had to strip out dead wood, but they are hopefully now in a good position to prosper as the mortgage market starts to recover.

The challenge for all firms will be whether profitable growth can be achieved using roughly the same resources as they currently have – only working harder, or if an increase in headcount – sellers and administrators is really needed.

The industry should currently be in better shape than before the credit crunch to assimilate greater volumes – we are all more automated, better qualified and experienced, and there are fewer lenders active, and fewer products available.

Firms need to manage their metrics – how many leads, how many first appointments, how many sales and see if they can ramp up productivity from their existing adviser team rather than just adding in more heads to the front line.

And as mortgage volumes increase, it is also increasingly important from an earnings point of view to do the full job with each customer. The protection sale, which should run alongside the mortgage sale, is normally an appreciably shorter process than a mortgage sale, but is often more remunerative. On a ‘pounds earned per hour’ basis, it’s hard to beat, and it should form a key element of any firm’s plans for rebuilding financial stability and performance.

So, getting back to historic levels of productivity, rather than just adding on new sellers has got to be the profitable way to go. And it would be nice to think that those who have made it through the storm can benefit by increasing their individual and firm earnings.

And somewhere in that return to greater margins should also be a whole cohort of happy customers who feel fully protected should bad news strike, and with them an army of very proud advisers who are glad they bothered to open the protection discussion. Without these we will never achieve that revered ‘professional’ label that our industry so desperately craves.

Duncan Crocker is managing director at Legal & General Network

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