However, as the company headcount cusps 40, recently-promoted MD of sales Alison Pallett shares the inside story on the lender’s growth plans to launch interest-only term-end solutions for younger applicants, its pivot and strategic director Pat Bunton’s exit from the lender.
Victoria Hartley, group editor, Mortgage Solutions (VH): The company headcount has grown by 75 per cent since launch in July 2020 from 20 to 35, with another 15 per cent targeted by the end of March as the company will hit roughly 40 members of staff. What plans do you have for the year ahead including new launches or product tweaks?
Alison Pallett, managing director, sales Livemore (AP): So, 2022 is going to be the most exciting year. We launched during the middle of the global pandemic in July 2020 and quarter four has seen record volumes for us across each of the last three months. Even we broke our record in December, which for me, having been used to always seeing season analysation in your operating plan was just truly amazing. Meanwhile, I’ve hired my first two business development managers, which was one internal promotion from the telephony sales team to cover the south and the southeast, and we’ve also hired an extra new person to effectively cover the north, which again, for us, putting people out on the road is a real investment. We’ve opened a second site, an office in Bristol, which is around diversification of recruitment so that we can fish in different parts of the market.
New products are also going to be coming fast and furious this year. When I say we’ll be pivoting, our core strategy suggests we are only interested in the over 55s, but what we’ve learned in the last 12 months is that the market is just so much bigger than that. So we are going to be launching interest-only products for slightly younger people. We’re aiming for a 1 February launch. The consumer demand has driven this and there’s quite a lot of evidence which suggests that consumers are sometimes finding it quite difficult to get their requirements fulfilled. Brokers are doing a stunning job, but we’ve actually had case studies where customers have taken three brokers before they found one who can really help them get what they require. We’ve been attempting to educate the market on how retirement interest-only fits across the mainstream and equity release markets. It’s also a badly-named product – you don’t need to be retired and research tells us customers automatically count themselves out because of it.
VH: Who are some of your best broker relationships/distributors?
AP: Some of our best customers stride both the equity release and mainstream markets. We deal with people like Age Partnership, Responsible Life and London and Country very closely, among other brokers.
VH: What’s the commonality between these firms?
AP: I would, I would say that RIOs had a little bit of a bad press. The FCA launched the idea in a blaze of glory but we’ve seen lots of negative stuff around the numbers and the challenges around it. So, what we’ve been doing is we’ve been saying, look, consider these four key customer groups. Do you have any interest-only customers who are term-end customers? I reckon if you’ve been in business for any period of time, you have most definitely got those people. Have you got people who you thought needed equity release, but that deal hasn’t worked out for one reason or another? Some people are just ideologically opposed to equity release. Their family are ideologically opposed to it. Some of them are too young to get the loan to value they want. And then some people just can’t get through the underwrite because equity release takes a different stance in terms of the types of property they’ll consider. Finally, the fourth group are people who are asset rich, cash poor. So that’s the journey we’ve been on is helping people understand where these customers are, who these customers are, and what the solutions are that are available to them.
VH: Affordability is often quoted as a serious barrier to RIOs. What do brokers need to do to get over these obstacles?
AP: Okay, so the first thing I can tell you is that 52 per cent of all of the business we’ve written has been for single applicants. Okay, of our single applicants, 61 per cent of those are female. So, what that tells me is that there are a lot of older, single for whatever reason, choice or circumstance women out there who need this solution to help them. You can also write a term insurance policy to bridge the gap. Now, obviously, you know you have to factor in the premium and people say it’s always more expensive for older people. Yes, it is always more expensive for older people, but it can be the difference that can get the deal over the line. The average age of our female applicants is 69 years of age. Once you get into the stride of actually not being frightened to say tell me a bit about your pension. Let’s go to the government gateway to see how much state pension you will get and see when you’ll get it. What other assets do you have? If you have a buy-to-let property we consider that an asset. Just helping people ask the right sorts of questions can drive an absolutely brilliant outcome for people. Our oldest customer is 92 years of age. She’s a lady who we helped purchase her flat so that she didn’t have to go into rented accommodation.
VH: What issues do you think are going to be critical for brokers overall this year?
AP: Taking care of your client base, making sure you’ve got the tools in place for that. There’s lots to talk about on technology and the single customer view and how that’s all going to work. It’ll be interesting to see how it plays out. Because there’s one side of the equation which is you know, we’ve got all of this tech available and the brokers need to avail themselves of it. The other side of the equation is always can the lenders facilitate joining those things up? Meanwhile, where’s the purchase market going? Prices are going up and up and up and wages are not keeping pace with the remortgage market. Managing recruitment and resource is another major challenge. That was definitely one of our key findings when we undertook our recent recruitment. It’s a championship challenge to make sure you find them and keep the really good ones, so I think recruitment in the broker markets is going to be a big thing. Also, we’re pushing out wider geographically in the next few months. That’s part of our orientation towards making £200m of sales this year.
