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Exit strategy | 15
Sour taste Therefore mortgage adviser firms must not on their own in this process. Propositions
For some business owners this suggested move broaden their horizons, and they need not look like our own are there to help and smooth the
may leave a sour taste in the mouth; after all, too far away to find sectors which will provide path especially for those looking for new sectors
historically many firms have done the exact their business with much-needed (and to branch into, be they life, insurance,
opposite in the past. A significant number of considerably more attractive to purchasers) protection, equity release or even will-writing.
IFA firms in the 1990s jumped ship from the renewal income. It is an over-egged pudding There is much to be gained from working with a
IFA sector to (at the time) the growing sectors but the life and general insurance sectors are proposition that has those relationships already
of mortgages and general insurance in order to perfectly set-up to allow the ‘mortgage firm’ to in place rather than having to spend time and
move away from a regulatory maelstrom that make that move. Many intermediaries will have money trawling the market for the best
involved supplying the full advisory range of been providing advice on these products for opportunities in each sector. Firms should also
products and services, with all the related costs many years, however, one wonders how seriously consider outsourcing some of their work in
and challenges involved. However, once again, these areas have been taken as avenues to make order to free up time to concentrate on these
we must remind ourselves that nothing lasts the business as a whole much more attractive. opportunities; this is why many firms opt to use
forever and given that circle has turned, firms Let’s hope this is an old argument, however, in a separate firm to handle their compliance
have to adapt and change. the very recent past firms did not always look function.
This is why we have urged our member firms after their client’s GI and life needs as perhaps All in all, preparing the business for your
to look beyond mortgages and to take a hard they should have. Which is a real shame for any eventual exit is key. As we have stressed, in the
look at all aspects of their businesses to ensure number of reasons, notably that the firm should current climate, those looking to acquire
that every activity they undertake generates be aiming to become the one-stop-shop for all businesses – and in the IFA sector in particular
value for them, their client and the provider their client’s mortgage-related financial services this is a growing niche – are wanting much more
involved in supplying what the advisers need – needs and the fact remains that cross-selling in than a run-of-the-mill mortgage intermediary
i.e. sustainable value generating propositions. this way provides the wonderfully attractive firm. Diversification and in-built recurring
Plus the move into markets where the payment recurring income and helps establish a much income are fundamental to getting the most for
of renewal or recurring revenues is a priority stronger relationship between individual adviser, your business when the time comes. The current
that can no longer be ignored. Whilst there the firm and the client – who certainly at time of economic situation will undoubtedly have meant
has been much talk about the payment of a potential claim will thank you for addressing that many owners are having to push back their
procuration fees for mortgages and whether his/her full needs. retirement and exit plans. This means they have
lenders will continue to adopt this method of time to get their houses in order and to take
adviser remuneration, one thing is certain - Preparation advantage of the help that exists to get the
renewal commission on mortgages will not be Equipping the business for an eventual business in a position where it can be viewed
happening any time soon and, if I am being retirement is not an easy process especially if, as seriously as a strong investment possibility.
honest, the procuration fee seems a perfectly we have seen, the business is going to need to Now is the time to formulate your exit plan and
suitable way for lenders to remunerate instigate some fundamental changes to the way develop the business so it can generate the value
mortgage brokers anyway. it has previously operated. However, firms are you expect to achieve.
www.mortgageintroducer.com October 2009 Mortgage Introducer
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