It’s been nearly 15 months since I joined the world of independent financial advice at Westminster Wealth Management from Capital Private Finance where I was servicing estate agents. As a mortgage specialist for well over a decade I’ve seen plenty of highs and lows in the market and the current climate is one of the most interesting and, I believe, one of the most promising for Brokers. Here’s why.
Firstly, conversion rates. As a mortgage practitioner the difference in conversion rates between working in estate agency groups and working at an IFA or other professional introducers is stark. Most estate agency advisors experience a conversion rate model of around 10% to 15% but at Westminster Wealth it is circa 60%. Add to that the culture, professionalism and ethos at a top IFA firm and it made perfect sense for to me to join the IFA world. The excellent lead source and ‘quality over targets’ approach of an IFA make it a much more rewarding place to work.
Secondly, post-MMR the need for independent mortgage advice continues to grow. The value to lenders of broker business has increased. Pre-MMR the mortgage market was generally thought to be 50% broker, 50% direct, whereas now it is more like 65% broker, 35% direct. While financial services seems to be dis-intermediated as a whole, in the mortgage market the reverse is happening. HSBC has properly come to the broker market for the first time through Countrywide after their market share dipped, while TSB have also come to market with selective distribution (incidentally, Westminster Wealth are one of the firms with which they have partnered). It is also encouraging that new entrants such as Fleet Mortgages have chosen brokers as their sole distribution channel.
As you can tell, we’re very confident about the future of independent mortgage advice and I’ve been working with the Managing Partner, Martin Lockyer, to recruit and grow the mortgage team in the past year. We placed over £100m of lending in 2014 and we are on course to reach £150m in 2015. The target for 2016 is £250m, which we believe is attainable with the recruitment of high quality brokers and the buoyancy of the post-MMR market. Our mortgage offering is central to the overall growth plans for the business, which is to attain 50 IFAs with £1bn of assets under influence by 2018. So, the message is that the independent mortgage advice market is strong and that it should be playing a central role in the growth of any financial planning and wealth management business with scale and ambition.
