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Intermediary mortgage market ‘ripe for consolidation’ – Marketwatch

  • 11/04/2018
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Intermediary mortgage market ‘ripe for consolidation’ – Marketwatch
There has been a recent flurry of mergers and acquisitions in the intermediary mortgage market.


LSL’s purchase of Personal Touch Financial Services and Enra Group buying Vantage Finance are among the deals to have taken place so far this year.

So we asked this week’s Marketwatch panel if there is likely to be more consolidation in the market and what it means for advice.


Toni SmithToni Smith, chief operating officer at Primis Mortgage Network

The intermediated mortgage market is ripe for consolidation.

A less dynamic housing market, especially in London and the South East, the increasing regulatory burden and the availability of funding to do deals, due to low interest rates, all point towards a drive for scale and deal-making.

In order to compete in today’s market, size matters.  This means strategic mergers and acquisitions are very much on the agenda.

As one of the UK’s largest mortgage networks, our focus at Primis is on providing the best solutions for our members.

The recent acquisition of Personal Touch Financial Services, a business which complements our own culture and values, is a perfect example of when consolidation into our financial services business made complete sense.

After all, greater scale means that we can pass on greater benefits to our members.

This approach to strategic consolidation offers a number of advantages.

Member firms benefit from increased stability and a wider network of expertise to call upon, including compliance and regulatory support.

For brokers and members alike, joining a bigger company gives them the chance to feel part of a thriving, growing business.

The intermediary sector has rarely been stronger in terms of market share of overall lending – but as ever, there are challenges ahead, and we can expect further consolidation in the market.

We certainly view scale as an important USP to have right now, and we believe that size offers significant benefits in terms of providing a surer footing and helping to future-proof the business models of our partner and member firms, and ultimately the end customer.


MFA Suzanne BradshawSuzanne Bradshaw, managing director of Mortgage & Finance Arena

As the market becomes more challenging and the lines between business and residential finance are increasingly blurred, I believe that there will be more consolidation whether through formal mergers or on a more informal basis.

We recently merged with local long-established adviser Howard Thomas who shares our expertise in providing a broad service encompassing commercial and residential mortgages, loans and financial advice.

As a company covering commercial and residential mortgages, as well as finance and insurance support for both businesses and individuals, it is difficult to find the right fit for new roles.

Expansion through merger with like-minded companies therefore reduces the risk for a business such as ours.

Smaller independents such as Howard face the dilemma of needing a bigger team to handle increasing volumes of client work, so we are able to support his clients in that way.

Merger and consolidation is also an effective way of building on areas of expertise or expanding into growth markets

As well as a merger needing to make business sense, it is vital that a move such as this fits in with both parties’ ethos and values.

We knew our merger would be a good fit with quality of services and putting the interests of the client first being at the forefront of our minds.

Dan White FinancialDan White, managing director of White Financial Services

Across any competitive industry, as a business grows it wants to take a bigger slice of the pie and increase market share.

It’s a bit like the good old saying, ‘if you can’t beat ‘em, join ‘em’.

This philosophy works well in theory but only with thorough strategic planning, especially in our industry.

I only really see any benefit in large organisations, such as networks or brokerages with 20/30 advisors plus merging.

But the key, in my opinion, is to ensure the environments the advisers are working in remain or improve.

The advisers are the ones who bring the business through the door and are undoubtedly the ones who have played a huge part in the company growing to its current level.

Brand awareness can play a part, but I don’t think it’s a huge influence, it’s more about meeting or even exceeding client expectations and providing a reliable, trustworthy service that delivers the right outcome for the client.

A company only really has any value based on contractual guarantees.

Loyalty or service doesn’t have any value to anyone else apart from the owner or key person providing that service.

A recipe for success for any sized business is morals, principles and ethics, as well as always looking to improve market knowledge, ensure strong compliance and consistently provide exceptional service.

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