Speaking in his opening address at the ICC in Birmingham, he said that technology could be used to qualify and prioritise leads, as well as generate leads. It will also “deliver value and build trust and loyalty” before the customer is ready to receive advice, which is crucial for future lead flow.
Brodnicki added: “It’s a massive challenge but it is also a massive must-do for us to secure our futures and to be able to evolve our business models and scale with absolute certainty.”
Lead generation deals
Brodnicki pointed to partnerships with Booming, Beehive Money and Moneysupermarket as examples of lead generation that will allow MAB to target customers wherever they were in their mortgage journey.
He added that over the past 18 months it had trialed new lead generation initiatives, including appointed representative dedicated marketing executives and its customer care team in Derby.
Brodnicki said that both had “produced great results” and “received fantastic feedback” and consequently these would be expanded.
He said: “This is just the beginning of a massive project about learning more about our customers and future customers than ever before. It is about delivering value and trust very early on and significantly widening the number and type of resources that will help build additional high quality and high conversion lead flow, months, even years earlier than we do now.”
Working hard on customer acquisition
He reiterated his pledge for MAB to become the number one in lead generation and fulfilment, adding that it would help its partners get more out of new sources and existing customers and trial solutions to increase lead flow.
He said: “Lead generation is the engine room of every single business and it drives every decision that every business makes. I believe every business should first assess itself as a lead generation business in terms of consistency and security of lead flow, lead quality, lead capability, lead source, exposure and aggregated lead cost.”
Promise to advisers
Speaking about his technology pledge at the previous 2019 conference, which said that it would “build technology to be proud of”, he said that it had not made as much progress as he would have liked.
He said that the business had since increased its technology spend threefold and it was now starting to deliver the “planned functionality”.
He added that whilst it would have been easier not to build the technology in-house it was “absolutely the right thing to do”.
He said that the Midas ecosystem, which has been updated, needed to respond to the individual requirements of every customer, business adviser and lead source and he promised it would do “exactly that”.
Brodnicki said: “Despite the Government-imposed restrictions and national lockdown that lasted for much of the first half, housing market activity was fueled by strong consumer demand following the re-opening of the housing market last year as well as the stamp duty holiday.”
He added that the group achieved record levels of mortgage applications and completions per adviser during the period to June.
MAB advisers achieved gross mortgage completions of £11bn in H1 2021 against £7.5bn in 2020 and £9.6bn in new mortgage lending against £6.4bn the previous year. Product transfers also rose from £1.1bn to £1.4bn.
Across the market, UK gross new mortgage lending activity (excluding product transfers) in H1 2021 rose by 58 per cent to £169.9bn compared to H1 2020, which was heavily affected by the closure of the housing market in Q2 2020, and by 34 per cent compared to H1 2019.
The only mortgage advice company listed on the Alternative Investment Market (Aim) said its market share of new mortgage lending represented six per cent of the UK market in H1.
Brodnicki said: “The increase in home-mover activity was particularly pronounced, largely driven by changing working and living patterns. The 30 June 2021 stamp duty holiday deadline in England, Wales and Northern Ireland generated record completion activity levels in June 2021.”
Adviser recruitment
Mortgage adviser numbers rose seven per cent to 1,694 to the 30 June 2021, but reached 1,800 after the first half period on 24 September.
The average number of mainstream advisers rose 13 per cent to 1,584 with revenue earned by each adviser up 28 per cent.
Brodnicki added: “We achieved seven per cent growth in adviser numbers despite the delay in recruitment pipeline conversion due to the UK lockdown and restrictions for much of H1. We expect to see a significant increase in adviser numbers in H2 and moving into 2022.”
The firm also reported acquisition of a 49 per cent stake in specialist new build broker Evolve FS.
Lead generation
MAB signed a raft of lead generation deals in H1 targeting technology helping first-time buyers acquire new homes. The firm invested in and signed a strategic lead generation deal with Boomin, a ‘next generation property portal’, which matches property buyers with targeted streets and promises the most ‘accurate online valuation’ ever
MAB is planning to provide mortgage services across various parts of the Boomin portal, with the opportunity to engage and nurture passive consumers in a meaningful way as they move to becoming active buyers.
It also reported ‘significant progress’ with its commercial deals securing early customer capture with The Nottingham Building Society’s Beehive Money app, an online saving portal and Moneybox, a consumer-facing personal finance management website and signed a long-term agreement with Moneysupermarket this week.
Brodnicki said: “I am confident the recent developments in lead generation and continued enhancements to our technology platform put MAB in an ever-stronger position to accelerate the pace of its growth.”
He added: “As customers adapt their ways of researching and buying mortgage products and services, MAB intends to be at the forefront of this change and increasingly drive a meaningful flow of quality leads through AR firms, thereby ensuring both their and the group’s future growth and success.”
The firm’s revenue performance was better by 43 per cent compared to H1 2020 and by 49 per cent against H1 2019.
Since 2019, its number of mainstream advisers has risen by 28 per cent to 1,584, while revenue per adviser has grown by 17 per cent.
Total broker numbers including directly authorised (DAs) and later life advisers, had reached 1,694 as of 30 June 2021.
The group said lead generation capability continued to build strongly. This included through long-term agreements with “one of the UK’s leading price comparison websites,” and with Nottingham Building Society’s Beehive Money app.
Additionally, it noted a commercial relationship with Moneybox, signed in March, and the acquisition of a stake in Evolve FS, a new build advice firm, last week.
The share purchase in Evolve added 35 mainstream advisers to MAB. “This is a strategically important addition to the MAB New Homes proposition as the group looks to achieve an even stronger market presence in this specialist sector,” the half-year statement said.
The group outlined trading as in line with expectations for 2021. It added that based on current business momentum, derived from maturing and new growth drivers, it was well placed to exceed expectations for 2022.
“Underlying fundamentals are driving sustained consumer demand for housing and mortgages,” said Peter Brodnicki, chief executive at MAB (pictured).
“With restrictions starting to slowly lift from mid-April, we have now completed most of the recruitment discussions that were put on hold and therefore expect to see a significant increase in mainstream adviser numbers in H2 and moving into 2022, including the additional mainstream advisers required to service the new lead sources MAB continues to secure,” he said.
Brodnicki spoke to Mortgage Solutions in an interview last week: ‘We will continue growing but we’re never going to lower our standards.’
Evolve was founded in 2009 by Jason Blunden, who started his career at Lloyds TSB and then worked at Sterling & Law. The firm has a team of 35 advisers.
It is a specialist new-build broker with a national reach and is headquartered in Ipswich, Suffolk. Evolve also has plans to open a new office in Colchester, Essex this August.
The broker specialises in new-build mortgages, first-time buyers, help to buy, right to buy second-hand mortgages, remortgages, buy-to-let, equity release and lifetime mortgages, adverse lending, life protection and home insurances.
The acquisition of the stake follows MAB’s investment into new-build specialists Meridian, with the firm going on to acquire shared ownership broker Metro.
In April, MAB welcomed Mark Cook, who was Persimmon Homes’ former group sales and marketing director, as its non-executive director.
The new homes board consists of three non-executive directors: Andy Frankish who specialises in broking, Douglas Cochrane who focuses on lending and Mark Cook who brings expertise on developers.
There are also four internal board members, which include MAB’s chief executive Peter Brodnicki, distribution director Gareth Herbert, chief marketing officer Gemma Bacon and innovation director Matt Lowndes. New-build director Mobeen Akram is also a member of the team.
MAB’s chief executive, Peter Brodnicki, said: “Builders and new-build customers rightly have high expectations, and our aim is to deliver a best in class service to both by partnering with the best and most innovative new-build firms in this sector, and ensuring our in-house technology developments are tailored to the requirements of this specialist market and all its stakeholders.
“We have continued to add invaluable experience to the MAB New Homes Board, which now includes the highest calibre non-execs from the broking, lending and building sectors.”
Blunden added: “There is a strong fit between Evolve and MAB in terms of culture and shared ambitions, bringing together the best in technology, people, new-build vision and expertise. We are looking forward to the exciting next stage in Evolve’s development.”
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.
The advice network completed £17.6bn worth of mortgages including product transfers last year, up five per cent from £16.7bn in 2019, according to its annual results.
This was driven primarily by product transfers which were up a remarkable 50 per cent to £2.3bn from £1.5bn in 2019, although new mortgage lending also ticked up slightly from £15.2bn to £15.3bn.
MAB said this gave it a 6.3 per cent market share of new mortgage lending which was up more than a tenth from the 5.7 per cent in 2019.
Overall, the new mortgage lending market dipped nine per cent from £268bn to £243bn in 2020.
Adviser numbers rose eight per cent to 1,580 at the end of the year which included 97 at First Mortgage, which gained fifteen new brokers during the period.
Revenue was up three per cent to £148.3m from £143.7m including £14.7m from First Mortgage and gross profit was up nine per cent to £39.8m.
However, MAB’s statutory profit before tax dipped 16 per cent to £14.9m from £17.7m.
The firm put its weight behind criticism of the “unfair” Financial Services Compensation Scheme levy which it said would cost it around £1.5m in 2021.
“The reaction of other mortgage intermediaries to this unfair allocation of levies has been widely reported and MAB is supporting the challenge by the Association of Mortgage Intermediaries (AMI) so that future levies can become better signposted and fairer,” it said.
Boomin partnership and lead generation
MAB will also be increasing its lead generation strategy which it believes will become a major new contributor to its growth plans.
It revealed a partnership with property site Boomin is on the horizon to provide mortgage services across various parts of its platform, following on from similar agreements with Moneybox and its Home Buying Buddy app.
This is part of its aim to widen its customer base by interacting with prospective borrowers sooner.
“Although MAB appointed representative (AR) firms have typically sourced, acquired and serviced customers largely or wholly through their own contacts and relationships, MAB will now be playing an increasingly important role in adding to that lead flow,” it said.
“Reliability, quality and scalability of lead flow drives every aspect of adviser and firm performance, and MAB’s unique business model is key to our ability to drive meaningful lead flow through our partner firms.
“This strategy will in turn increase adviser productivity, drive organic adviser growth and AR firm recruitment, and further enhance consumer brand awareness,” it added.
Chief executive Peter Brodnicki (pictured) noted MAB had seen its pipeline of new ARs build strongly.
However he said that as MAB mainly focused on recruiting larger AR firms, some of these discussions had been delayed by Covid-related restrictions and as a result were unable to conclude at present.
“When restrictions are lifted, we expect these discussions can be quickly concluded,” he said.
Protection and GI revenue
Figures published alongside the results showed MAB generated almost as much revenue from protection and general insurance sales and mortgage completions.
In 2020 45 per cent of all revenue totalling £67.2m came from mortgage procuration fees with 40 per cent of revenue totalling £58.8m from protection and general insurance commission.
This 45 per cent to 40 per cent split was almost identical to the previous year.
It added that since the end of December, it had secured a strong business pipeline, increased adviser numbers by four per cent to 1,637 and taken a 25 per cent stake in FM North East through First Mortgage.
Strong position
Brodnicki continued: “These results once again demonstrate the resilience of our operating model and the quality and dedication of our management team and staff during a year of exceptional challenges.
“We took quick and decisive action in response to the pandemic that resulted in us not only coming through an incredibly difficult period in great shape and ensuring that our 2020 strategic objectives were met, but also putting ourselves in a strong position to start accelerating growth over the next few years.
“Despite the impact of the pandemic, our profitability and cash generation profile remained strong, which enabled us to reimburse all the government furlough grant income received.”
He also noted that the underlying fundamentals driving levels of consumer demand for housing were strong.
“This level of demand, coupled with the chancellor’s announcements earlier this month of the launch of a mortgage guarantee scheme, an extension of the stamp duty holiday until the end of June and the nil rate band being doubled until the end of September, and the signposted easing and removal of lockdown restrictions, are likely to improve housing activity further,” he added.
The app aims to give first and next time buyers a plan for the purchase of their home with informative content on the house buying process alongside mortgage and savings calculators.
It includes a checklist which tells users what they need to do before buying a home such as improve their credit rating and increase savings. It explains common purchase terms such as gifted deposits and lets users know when they have saved enough for a deposit with a savings calculator.
The partnership is also part of MAB’s plan to accelerate the adoption of technology into its network.
Life Moments already has a consumer app, FirstHomeCoach, which guides first-time buyers with property purchases. It uses the collected information to determine trends and feeds the data to its business partners.
Similarly, with the Home Buying Buddy app, MAB will use the data obtained to help them understand consumer needs and develop their client offering.
Peter Brodnicki (pictured), CEO of Mortgage Advice Bureau, said: “This is another major step forward in terms of how we can further engage with our customers and offer a more personalised experience.
“It allows us to deliver tangible value to the customer from the early stages of their research process and home buying journey.”
Ben Leonard, CEO and co-founder of Life Moments, said: “Life Moments digital coaching technology engages and nurtures consumers to achieve their life goals. Buying a home is one of the most stressful but exciting life goals and working with MAB, helps us to provide the best tools to consumers, to help them achieve their home ownership dreams.
“This strategic partnership is a great example of how through collaborating with mission-aligned firms, we can help more people play life better.”
