Sally Laker is one of the nicest members of the mortgage industry and thankfully she was the first I met. During my first week at Mortgage Introducer my editor brought me along to an interview with her after the acquisition of her company Mortgage Intelligence by Countrywide.
Just over six months later I decided to catch up with MI’s front woman about how the acquisition had affected business and how the balance between AR and DA brokers had shifted with the changing economic and regulatory climate.
Yuan Phoon: How was 2011 for Mortgage Intelligence?
Sally Laker: Of course when we first met we had just done the deal with Countrywide. That has been going great. We’re really starting to see the benefits both ways of the acquisition. It’s a great strategic fit and we found that because the models are so different it brought so much more to the table and it opens up different opportunities as well.
For this year we’re excited about welcoming in Slater Hogg and Hurst Independent Financial Services in March. A lot of the work has been done with the view to them moving across to our network. Also in 2012 one of the areas that we want to specialise in is the new build arena.
We had thought about this a few months ago and the recently announced government new build indemnity scheme is going to work nicely with that plan. Just looking at the companies which we have within our stable that are into new build (and of course Hurst which is into new build) we see it as an area of a market where business is being done.
We’re interested in building it as a specialist area for Mortgage Intelligence. We’ve been known to be big in the buy-to-let market and we would like to be known in the new build area as well. We’ll be looking at how to attract brokers into new build in our company.
YP: Has there been a shift between DA and AR brokers? Which would you recommend a broker to be? You’re clearly in a great position with both the club and network.
Sally Laker: Spot on. One thing that I like in business is to be able to offer choice. That’s something which we’ve always done. Certainly having both propositions does offer choice for the broker. We would never force a broker to go down one route or the other because we understand that some brokers are happy being directly authorised and other brokers enjoy being appointed representatives. I wouldn’t say there was a right or wrong way, they both work.
What we are currently doing is re-vamping our DA proposition under the name of Next Intelligence because we had two club models, both identical and doing the same thing but under separate names so we felt we’d bring those together but also we wanted to look at what else we could add to that offering.
I think it would be fair to say that we have seen an increase in the number of AR applications and the majority of those have come from the directly authorised arena. That isn’t the case every single month.
It depends on what a broker’s plans are for the next five years. Some brokers are thinking of going the AR route, particularly where the principal of the firm is key to bringing in new business and can’t be caught up in compliance and running the business.
This wasn’t the case pre-credit crunch where the principal could have a number of business writers. Now businesses have become leaner, this is where the network model can help, to free up the principal to get him out there and get in more business transactions.
The AR model doesn’t work for everybody and there are brokers who love being directly authorised and that’s fine too. They can then tap into a larger organisation as part of a mortgage club and keep track of changes in the market.
Despite the market being smaller with fewer lenders, products change all the time and so we have a broker desk here that can answer questions daily and provide up to date information. That’s been very popular with both AR and DA brokers.
YP: The continuing Euro crisis has been dominating the headlines of late. How do you see the crisis affecting brokers?
SL: The Euro crisis is very real and obviously it can affect a huge number of people and not just the financial services in the UK. Can mortgage brokers do anything to make a difference or stop the crisis? No I don’t think we can but I do think that whatever the outcome is on the Euro, it will involve the mortgage industry in some way.
The credit crunch has delivered an incredible coping mechanism for the market. When you think about where we were in 2006 and 2007, some of the headlines were about the near collapse of Northern Rock, HBOS and RBS. We were saying at one point in those days that we were almost unshakable as we had been through so much but the next piece of news became more shocking than the previous.
We’ve now proven as an industry we’ve got an incredible survival technique. The tough times we’ve seen have made us stronger and better able to cope.
We don’t know what the impact of the result of the crisis will be but the entrepreneurial attitude of the mortgage industry, the fact that so many people have survived, should make us confident that we will have a way to work around it.
