The MCD is now with us and in my opinion it brings with it significant opportunities for brokers who have an appetite for growth and are not pre-occupied with the frustrations that the introduction of new legislation often brings.
In my 44 years in financial services I have shared the frustrations of many brokers but believe I have always had an appetite to embrace the new rules in a positive way that would give me competitive advantage. Usually that involved getting into bed with the right partners who had the same growth ambitions as me.
Second charges and bridging are two specialist sectors that I am convinced offer brokers opportunities to diversify but in many instances that will mean brokers will need to partner with a specialist in the sector and come to a commercial agreement within FCA permissions.
So how does a broker choose the right partner? Well their due diligence should involve asking brokers who have made the move for their experiences. The obvious targets should be from within their own network or trade body (e.g. NACFB) With this knowledge they should then have detailed conversations with a variety of specialist and master-brokers, to determine if they have the same aspirations and their respective businesses have the potential to deliver a culture that will mean as one business grows so will the other. For this to be achieved their business plans have to be compatible and each one should reflect the importance of the other firm in achieving their annual sales targets.
Regrettably my experience has taught me over the years that many brokers (and master brokers) do not have robust business plans so are unlikely to have the appetite to forge these relationships, but those who do broaden their options will inevitably increase their client numbers and grow their business.
Two way communication is at the core of any successful business and that is particularly true in the specialist lending sector. Only brokers who are proactive will survive if they choose to diversify and their partners need to be of a similar persuasion.
Get it right and brokers will see their client bank grow but again a word of warning – too few brokers really work their client bank and remain ignorant of the multiple opportunities that their clients offer them in such as the second charge, bridging and even the likes of equity release.
So brokers now have the chance to use their improved knowledge about the MCD to extend their product options and grow their client bank but for many their growth will depend on how successful they are at choosing their specialist lending partner. Good luck with your search.