Intermediaries across financial services are moving away from “costly, restrictive network firm structures, to the independence of being directly authorised,” the parent firm of SimplyBiz Mortgages club said in a statement.
Neil Stevens, joint chief executive at SimplyBiz (pictured), told Mortgage Solutions that as the broker market has become more professionalised advisers “don’t need networks’ structures anymore” where “too much of the value” generated by them is paid to the network.
He said firms have realised they can lower their operating costs by going directly authorised (DA) and that is a trend which looks set to continue.
Stevens added that SimplyBiz’s specialist teams have helped hundreds of companies to set-up as DA and claimed it is the largest supplier of new applications to the Financial Conduct Authority.
SimplyBiz looking for further acquisitions
The group reported in results for the six months to 30 June 2018 that member firms have increased by 5.7% year-on-year to 3,628, with more than 1,600 members of the SimplyBiz Mortgage club.
But the firm reported a loss of £1.2m for the first half of the year, after £3.6m of costs related to the IPO on London’s AIM market in April.
Revenue at SimplyBiz grew by 13.7% year-on-year to £24.2m, while mortgage services revenues at the group increased by 18.6% to £3.1m, thanks to the increased members and greater lending in the market.
In the first half of 2018 SimplyBiz Mortgages lending through saw completions up 20% year on year – with 25% of completions by value coming from remortgages, Stevens said.
The results also revealed the group had raised £30m from the IPO, which has been used to pay down debt.
Stevens told Mortgage Solutions the group is now in a position to use cash generated to “pursue selective acquisitions”.
He added: “There’s some opportunities out there where we can buy on the services side or can buy on the distribution side.”
Stevens said the firm is not “targeting any specific” type of firms but “looking at the market”.
In January SimplyBiz bought Landmark Surveyors to strengthen its capabilities in providing home valuations.
Regulation boosting business
The group said increased regulation, including GDPR, has helped the business by creating opportunities to engage and support its members through additional service offerings.
Ken Davy, chairman, said: “We are delighted to announce our first results as a public company, following our successful AIM flotation in April.
“Our IPO in April 2018 has been very well received by our members and partners and we have already witnessed positive commercial and reputational benefit.
“We continue to increase the number of members and channel partners that we serve, as well as look to pursue selective acquisitions.
“I would like to thank everyone in the SimplyBiz team for their dedication in delivering a successful first half of 2018.”