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14 | Exit strategy
Exit
opportunities
Bob Hunt, chief executive of Paradigm Mortgage
Services, explains why you need to think about
having a flexible exit strategy in your mind
t’s an obvious point but none of us are the last two years of Credit Crunch and The fact of the matter is that today very few
I
getting any younger, and given that the liquidity crisis should have taught us, it is that firms who rely solely on mortgage business
average age of most advisers is much nothing lasts forever. Those boom years pre- and only bring in revenue through mortgage
more likely to be closer to 50 than 25, 2007 may have seemed like they’d last right up transactions are in such a strong position.
we can safely assume that the issue of until retirement – indeed for some, an early Indeed, one would hazard a guess that with
retirement and how we will exit the retirement may have beckoned if they had gone few exceptions many of our best mortgage
industry is certainly on most of our on - however, and this is completely broking firms who operated this model are
radars. Indeed, if you are fortunate enough to understandable, some mortgage firms would either no longer in the market, or no longer
be in the 25-40 age bracket, then it is still have looked at how they conducted and working to this model, and certainly one
never too late to have a flexible strategy ready brought in the business back then and come to would assume that no firm is just providing
for when the time comes to make that move. the conclusion that ‘if it ain’t broke, why fix it?’ advice on mortgages. The market contracted
In fact, being aware of the options available to As I say, this is understandable given that I so much that to survive simply as a mortgage
you and ensuring your business is in the best would assume many mortgage firms would advisory firm was almost impossible;
shape to make the most of your exit have been running on very healthy levels of diversification and improved cost/income
opportunities, should be a priority for all transactional business. Given the wealth of management has been the name of the game
regardless of what stage of life you are at. funding available at that time and the vast over the last couple of years and there’s no
The point is it is never too early (or too late) array of criteria across thousands of products, doubt that this will continue to be the best way
to begin planning an exit strategy, whether you it was possible to fit most borrowers with a forward.
are on the verge of setting up your own mortgage. Clients who walked out of the door The point is that all business owners should
advisory practice or you are in ‘T-minus’ mode with their mortgage were often never seen look at what they would like to achieve when
to retirement. Having a plan in place is much again, which would not have worried most they exit the market and, having done this,
more preferable to making it up as you go firms simply because (at the time) they would they will be in a much better position to gauge
along only to find that you’re left with very have undoubtedly been replaced by at least one whether their current business is adequately
little option when it comes to making that final or more potential borrowers taking their place. equipped to meet their ambitions. One would
decision. Too many advisory firm owners have When the supply of potential clients is that suggest that those firms still bringing in
had to accept second, third, even fourth best good and the mortgage market has so many predominantly transactional-based income
when they wanted to leave the industry simply strings to its bow – sub-prime, buy-to-let, self- will not be presiding over a particularly
because they were unsure about what they certification, etc – it would probably have felt appealing proposition for potential purchasers.
wanted from their exit and their business was like the gravy train could never end. This is not to say that, they could not sell their
not in the correct shape to allow them to meet business but it will certainly not be fetching
their changing expectations. Strong position the kind of sums reserved for those firms who
One hopes that those business owners who have made the move away from simple
Crunched chose the boom period of a few years back to transactions and now have an offering with
In the mortgage market, if there is one thing make their exit did so with a healthy pay-off. built-in recurring income.
October 2009 Mortgage Introducer www.mortgageintroducer.com
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