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‘We will continue growing but we’re never going to lower our standards’ – Brodnicki

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  • 22/07/2021
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‘We will continue growing but we’re never going to lower our standards’ – Brodnicki
The Mortgage Advice Bureau (MAB) will continue to target adviser growth in the coming few years, but the focus will remain on quality over quantity.

 

Speaking to this publication ahead of the broker’s 21st anniversary, chief executive officer Peter Brodnicki (pictured) said: “I’ve always been about attracting high calibre firms of high calibre advisers, not just adding to numbers any way I can.”

He said: “We will continue growing but we’re never going to lower our standards, we have a formula that works for us and our partner firms and advisers.

“We want to continue attracting the best and most ambitious in our sector — firms and advisers that are adaptable and constantly seeking to improve and innovate,” Brodnicki added.

MAB was launched in 2000 and has grown to a network of more than 1,600 advisers in the UK and launched in Australia in 2016.

Last year the company welcomed a new joint venture partner for MAB Broker Services, Australian Finance Group, which at the time Brodnicki said provided the “optimal platform for growth” in the region.

Brodnicki said that MAB has certainly not dismissed launching into other countries but that it would be highly dependent on finding the right partners.

He explained: “Australia was a test for us, and we’ve got a phenomenal partnership out there. What it has taught us is that the best results are achieved in partnership and finding the right partners to collaborate with and work with, whether they’re invested in you or if they’re just working with you.”

The company floated on the Alternative Investment Market (AIM) in 2014 with an £80m market capitalisation, making it the first publicly-listed mortgage intermediary.

Asked whether other firms would follow MAB’s lead and list he said it was one of many available options including acquisition, consolidation or private equity backing.

He explained: “Listing is the more complex option. It is hugely time consuming, costly, and you’ve got to have long-term commitment to the business. Your business needs to be of a certain size, with strong and sustainable profit growth.”

“What I’d say to people is don’t grow a business to sell it, grow a business to deliver what customers need to be delivered. You need strong management, strong controls and processes, and strong profit growth,” he said.

 

Product specialisation

Looking ahead Brodnicki emphasised the importance of technology and data in adjusting to changing customer demand, as well as for increasing business efficiency.

He also noted that leveraging technology would lead to increased product specialisation, meaning products would become more tailored to individuals than to groups of customers.

He added that this would only heighten the need for intermediaries.

Brodnicki said: “Everything is about the customer; not what we think works best for us. It’s irrelevant what anybody else thinks. It is about what the customer wants, and customers’ expectations are changing as a result of enabling technology.

“Customers expect everything faster and easier, and rightly so. They look for not just the widest choice of products, but also choice in how they research, receive advice and apply.”

He added that currently, intermediaries are unable to see the whole picture of their customers, making the sector more transactional than proactive.

“Everything in life is about timing. We know when a customer comes to us for a mortgage — and when that mortgage is reviewable for a remortgage or product transfer. But there’s a lot more going on in our customer’s lives that we need to understand more about,” he said.

Brodnicki continued that he wanted MAB to engage in new ways of helping and learning about its customers, whether face-to-face, by telephony or a blend of the two.

He noted: “There’s no bad news about technology for brokers and customers, but business models need to adapt for technology to have greatest impact.

“However, as technology simplifies the mortgage research and application process, it will bring increased competition, attracted by the simplicity, that will keep down costs and simplify scalability.”

He said that currently, competitors were “put off by the complexity”.

 

‘Decide what you’re good at’

In 2010, MAB increased mortgage completions, market share, adviser numbers and revenue.

Gross mortgage lending was £17.6 bn, up five per cent on the year before.

New mortgage lending totalled £15.3 bn, of which product transfers made up £2.3 bn or 50 per cent. This was attributed to lending restrictions on remortgages during the year.

Brodnicki said last year’s trends in product transfers should be disregarded as “anything to rely on”.

“Ultimately, in terms of balance between product transfers and remortgages, the most important thing is to make sure we do the right job for the client. It’s easy to do a product transfer, but over time it’s going to become a lot easier to do a remortgage,” he said.

Remortgages were set to become easier owing to improved speed, and ease of comparison and application, fuelled by technology.

“If you’re making that decision about your mortgage at a product end date, why would you not want to access every single lender just like when you first purchased your property? Why would you just go back to the same lender you’re with without fully comparing your options? It’s our responsibility as intermediaries to ensure that happens,” he said.

MAB would increasingly be targeting first-time buyers and later life sectors, and wanted “to join the whole lifecycle together,” Brodnicki said.

“The business – enabled with technology and using specialist advisers – can service all their customer’s needs,” he added.

There were increasing opportunities for partnerships “combining to deliver a best-in-class and fully-rounded customer proposition,” Brodnicki said.

He noted the recent deal with Nottingham’s advice and search subsidiary, Nottingham Mortgage Services, which was sold to the Belvoir Group and will be managed by MAB. The partnership will help build the mutual’s digital presence.

He said: “We’re moving more into a world of specialisation. Businesses have to decide what they’re good at, and maybe what they’re going to build themselves and become better at.

“As well as what may not be a priority for them right now or which may be better delivered through a third-party partnership or collaboration.”

 

Value in office-based working

Commenting on the value of office-based working, in the post-pandemic era, Brodnicki wanted to see “as many people as possible returning to the office”, because working together, in person, brought numerous synergies compared to remote working.

He said: “We understand the world has changed and there needs to be a level of flexibility, but we see in our business a significant value from people working together — and I don’t mean on Teams or Zoom.

“Learning together, innovating together, and enjoying working together has massive value, and we have worked that way for a reason, not because we hadn’t thought about home-working before Covid.”

Additionally, he noted the potential for underestimating the long-term impacts on mental health from continued remote working.

“Evolution can be speeded up as a result of what we have all gone though over the last 18 months, but reactive revolution is surely not the answer,” he said.

He added that firms that have made decisions around premises in the immediate aftermath of the pandemic may find it hard to u-turn, and that in a year to 18 months it could turn out not to have been the right decision.

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