Good advisers will ‘win out’ but more ‘inconsistent lending decisions’ being made – Jupp

Last year, Brightstar posted 21 per cent growth in its turnover for 2022, marking a record-breaking performance for the group.

However, despite its strong performance, the group cautioned that the outlook for the market would be challenging. That said, according to Jupp, the opening months of 2023 have been “surprisingly positive”.

In an extensive interview with Specialist Lending Solutions, the CEO discusses matters professional and personal including the current specialist lending market, the challenges faced by lenders and brokers in the current volatile climate and how the industry is dealing with issues around mental health.

Last month, Brightstar announced record turnover. What was behind the growth?

This is our twelfth year in business and our growth has always been steady and considered. The reason we’re having such strong growth is that the ‘boring’ things that are business critical are so well ingrained. The only time we didn’t have growth was during the Covid year, which was understandable.

The growth is down to the fact that we’ve been around a long time. We are considerate in what we do, we have great people and we have relationships with 70 per cent of the UK mortgage intermediary market. We are seen as a safe pair of hands.

Overall, what would you say was the current state of the specialist lending market?

It’s very positive – most intermediaries now operate at some point in the specialist market. Most brokers would now be able to identify an appropriate product for a client in the specialist market. Either to pass to someone in their own business, or pass to third party like ourselves.

If I think back to the pre-credit crunch environment, it was just not sustainable – client outcomes weren’t considered, and it was very transactional. Now, I believe clients are using the specialist lending market as a way in.

What challenges do you see in the market at present?

Actually, we’ve been very surprised at how positive the opening months of 2023 have been.

However in terms of challenges, we have a market that has higher interest rates, consumer spending is being squeezed and there is a concern over possible increasing unemployment (although this hasn’t come to pass yet) – with these basic parameters, business will be tougher.

But on the other side, despite base rate rises, we’ve seen swap rates coming down much more quickly than anticipated and that has helped us.

Where do you see the opportunities?

I think there’s never been a more important time for a client to get really good advice on the most appropriate product for them, particularly when it comes to budgeting. A lot of advisers were a bit self-serving in previous years and would just give borrowers a group of broadly similar lenders.

I think we’re in an environment now where the good advisers will really win out. It’s tricky getting mortgages, lenders are making it tough because of Consumer Duty – there are more inconsistent lending decisions being made than I’ve seen for a while. A good adviser will debate that decision and turn it around, so good strong advice will differentiate the best in the market from the rest.

In the current market, if you’ve been around a while and you have a good client base, you’ll really benefit over the next two years. If you’re new and starting up, it may be difficult as it will take a while to get established and you’ll be up against those who have been round a lot longer.

Mentioning Consumer Duty there, how will it affect the specialist market?

What tends to happen with previous policy changes, the difficult period is in the lead up to that policy change when you’ve got lenders trying to get comfortable with it. And that’s what we’re finding with Consumer Duty.

There is excellent support from the trade associations but there is still a lack of consistency. You’d think that given that we all need to follow the same rules on Consumer Duty, that there would be something of a herd mentality, but we’re not finding that.

The period up to the date will be most troublesome. For the next three to six months, it may be a struggle but it should be fine once it’s in place.

As well as the increased turnover, you’re also looking to raise head count. How difficult has it been to recruit and how do you retain your staff?

It has been difficult to recruit the right people – but this is more to do with being careful in how we take on.

We have rigorous processes and we know that if we go outside those we’ll make bad recruitment decisions, and we have, in truth. We understand how we recruit, we are careful how we word adverts and the language we use – we realise that an advert written by a bloke could come across as too masculine and unfriendly to anyone isn’t similar to them, so we work hard to be inclusive.

We are very collaborative, we try to have as many stakeholders as possible. We called [those who work for Brightstar] stakeholders, not staff or employees. And once they’re in, we genuinely expect them to stay for life. Of our headcount, 40 per cent of staff have been here five years and 20 per cent has been here for ten years.

We won ‘Sunday Times Best Companies to Work For’ in 2019 and 2020. We were the top rated in any sector. It’s something we are very proud of, but we were genuinely gobsmacked.

On a personal level, you’ve spoke quite candidly about some of your struggle with depression and mental health issues. How is the industry dealing with these issues?

I think we are doing an excellent job. This industry is not conducive to good mental health naturally, it’s a tough job, especially last year when you were having real problems with rates being pulled and clients being let down. It’s a difficult job but what we’ve become good at as a industry is accepting that and acknowledging that across all sectors, there will be trigger points.

We have to provide internal and external support. With forums such as the DIFF podcast, there is a light being shone of these issues.

When I joined the industry, it was a very white, male business and now it’s a quantum leap ahead of where it was and a leap ahead of most other industries in the financial services arena.

We’ve done well but we will still have a fair way to go and hopefully, we can achieve even greater things.