When I go down to the Incisive Media reception to meet a weather-beaten Max Wright I find him standing in front of the TV watching the BBC’s coverage of the floods.
He turns to greet me with a humorous roll of his eyes and nods towards the coverage of the chaos caused by the rain raising a now defeated umbrella up in protest.
Wright met Mortgage Solutions editor Victoria Hartley just over 12 months ago following a cost-cutting exercise and strategic overhaul across the business.
“Weeding out the mortgage dabblers”, as Wright put it, is a phrase which has stuck to Personal Touch over the last 12 months and I’m keen to find out if the 2014 AR numbers are the result of some over-pruning or where the network wants to be.
“We’ve let go of the fascination with numbers,” sighs Wright. “We joke in the office when people ask us about numbers. It’s about as relevant as asking how heavy I am.
“By making the decision to remove the dabblers, which took up a lot of resource for a small amount of business, and the natural drop-off of the cultural outliers, those firms not prepared to follow us on the quality drive, it’s made a massive difference to our remaining business.”
At the end of 2012, the Which Network table reported PTFS to have 918 AR firms. By the end of 2013 this had gone down to 573. I asked him if he lost any of his top ten firms during this exodus.
The response is quick. “In terms of what? If you mean sales then yes we did. We actively encouraged some of those to find new homes – they would fall into the cultural outliers category.
“What matters is those which are left are delivering good quality advice.”
I can see Wright won’t be drawn on numbers but I give it another go and ask how many AR firms PTFS would see as its golden number.
Wright laughs at my persistence. “I got asked this in a staff meeting recently. If we had one member which delivered good quality advice then I would be happy.
“Obviously this is a tongue in cheek answer because one member would obviously not support our infrastructure but that demonstrates the cultural shift. If you really want to put quality at the heart of the business you have to let go of the numbers and that’s what we’ve done.
“I’m not saying we don’t care about making a profit but not a profit at any cost. If we can’t make money doing the right thing then it is a failing of our model and we should have the courage to do something different.”
PTFS estimates that its gross mortgage volumes increased by 9% in 2013 to around £4.8bn compared to 2012 and although the accounts have yet to be audited Wright is confident PTFS made a modest profit last year, which 18 months ago when he joined the company was what he set out to do.
Since joining Personal Touch in May 2012 Wright has had to juggle the pressure of rationalising the business with the firms programme of broker readiness for the Mortgage Market Review which will come into force on 26 April.
I ask Wright what he thinks will be the biggest challenge for brokers following the advent of the new rules.
“There is going to be more pressure on brokers to do more per borrower than in the past. They need to really understand their client and their financial situation if they are to succeed in delivering the standard of advice and service the MMR demands.”
Wright says it is no longer acceptable to consider if the lender needs the information – the broker should be considering if he needs it.
During the last quarter of 2013 Wright saw 50% of PTFS’s ARs through member events aimed at gearing brokers up for the changes ahead.
Wright is warning brokers to get organised and devise a structured routine to handling a client’s mortgage. I ask him if brokers are fearful of the impact of the regulations.
“There is an apprehension over the increase in paperwork which there inevitably is with all new processes but it will settle down after the second quarter of the year.”
A piece of work Wright is particularly proud of is the MMR-tailored factfind which members can use to walk them through a the more detailed client interview which will be expected.
“This is a significant piece of work for us which has been 12 months in the making and led by our members.”
I ask Wright if there is anything else he wants to say before he goes out into a literal hurricane to make his way across London and he laughs.
“Last time I came here I left with the tag of “mortgage dabblers” and my office groaned at the flack that would follow.
“I’m sure they’ll make the same noise when they hear I’ve added cultural outliers to that list.”
While he is in good spirits I thought I’d have one last shot at the numbers and ask him if thinks, given the reduced AR firms on the books and the impending MMR if expects mortgage volumes to remain steady, but instead I get “a look” accompanied with a patient smile.
“I think we will write more mortgage business this year than we did last year and now you’re going to ask me how much more.
“The reality is I think we’ll write more but if we didn’t I wouldn’t worry. We don’t have lending targets we have quality targets. If you have quality metrics you’ve got to let go of the traditional volume benchmarks, they’re obsolete.”
Well it was worth a shot.
