Shepherd Direct merges broker firms with Pure Protect

Mortgage Introducer

July 21, 2015

The new company is owned by Dale North, managing director of Pure Protect, and Shepherd Direct Group, parent of MoneyQuest and If I were You.

Rob Clifford, Shepherd’s director, said: “This is a true merger with all businesses now owned by a new holding company, Pure Financial Advisory.”

Both advisory firms will remain separately branded and the specialist advice proposition of Pure Protect will also continue as a separate brand.

Pure Protect provides independent whole of market protection advice and offers customers a full review of their existing protection cover and needs. At the end of the review Pure Protect provides advice and recommendations based on this information.

With plans to double the head count of all three businesses within 12 months the Pure Protect team has now moved into the Shepherd Direct Group head office in Nottingham.

Clifford said that the rationale behind the merger cuts across many different parts of the businesses’ own activities and the wider market in general.

Firstly, there has tended to be an industry-wide gap amongst mortgage advisers when it comes to reviewing both new customers’ protection wants and needs, plus those of existing/legacy customers.

“Many mortgage advisers will concede they have not been particularly good in these spaces especially the regular suitability reviews of protection clients,” he said. “Consider that the protection penetration for new mortgage customers tends to be in the region of 25-45% – with protection arranged at point-of-sale – and you can see there is a gap here, plus add in those existing customers who either have no protection cover or have inadequate cover, and you can determine how wide the consumer ‘protection gap’ is. Indeed, Swiss Re:’s latest figures suggest the UK protection gap is in the region of £2.6 trillion.”

There are a considerable number of mortgage borrowers susceptible to changing circumstances which could leave them struggling to pay their mortgage.

Clifford added: “They have, what we might call, unprotected mortgages with advisers unfortunately often leaving their clients without cover.

“Why might this be the case? Well advisers often cite the time required to conduct such activity and many will freely admit they need to get better at it.

“After all, this is not simply selling products that customers don’t want or need – customers need this in order to lessen the risk.

“With this merger, operationally the focus is on working together to offer other advisers across the entire mortgage market (DAs/ARs and their networks) an opportunity to use the Pure Protect service – as Moneyquest and If I Were You has for the last three years – in order to maximise their protection proposition and offering to new and existing clients,” Clifford went on to say. “Businesses can plug into the service and can generate a significant, incremental income stream whilst offering this highly important protection cover service to their client base.

“For Shepherd Direct, this merger shows its ongoing commitment to investing in, and growing, its mortgage advice and protection solution footprint.”

North added: “This is a fantastic opportunity to grow Pure Protect with the help and backing of MoneyQuest and If I Were you. Pure Protect already works with a number of AR and DA firms in providing this protection partnership approach and we have significant plans to roll this out further across the entire mortgage advice market.

“We’re not just looking to sell policies and make money; we’re looking to make sure the client is in the best position.

“Every client is reviewed every year. We try to keep in contact with those clients to encourage them to make us their first port of call so we can help them through the process, because the process can be difficult with some insurers.”

Both Clifford and North are driven to close the £2.6 trillion protection gap in the UK and want more DA and AR firms to refer protection business to Pure Protect, which contacts its existing policy holders to make sure clients are aware of when they can claim on an existing policy.

Clifford added: “Our driver was the following: this is a really significant market opportunity for the intermediary market to develop a plug and play solution for brokerages that can’t be bothered or haven’t got the time, or have not woken up to the opportunity of specialist protection.

“Dale was adept at spotting a commercial opportunity and alerting me to it.

“We are a growing intermediary business and we are interested in generating fresh mortgage flow.”

He added: “You start off thinking you are good at what you do; everything you do, but when you look at it a bit more closely there was a missed opportunity in the way we advised on protection.

“Our mortgage advisers were doing a good job but with Dale’s business I realised that if you get specialist advisers who know their onions that has to lead to better consumer outcomes and better penetration.”

Indeed, Clifford first met Dale North three years ago and it was discussed then how the MoneyQuest and If I Were You mortgage advice businesses could deliver even better service to their new clients in terms of the protection cover and products that they needed, plus how they could ensure existing customers had ongoing protection cover that was fit for purpose and at competitive rate.

A deal was struck back then between the businesses to partner and “this worked incredibly well from the outset”.

“Feedback from clients was overwhelmingly positive and volumes have continued to grow over the intervening few years,” said Clifford.

“Six months ago discussions began on how this partnership could be moved forward to a more permanent commercial partnership and it was decided that a formal merger between the businesses was the perfect solution.”

Clifford has been in the mortgage broking market for over 25 years and was notably founder and chief executive of national brokerage Mortgageforce.

He co-founded If I Were You with Shepherd Direct Group six years ago, while Shepherd Direct acquired Moneyquest the year before that.

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