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What is the n
Fahim Antoniades says the business landscape for brokers has changed fundamentally. Tomorrow’s business environment will be different, but no less rich in opportunities
The recession we’ve all just been
through was fundamentally different from recessions of recent decades. It wasn’t just another turn of the business cycle, it was a whole restructuring of the economic order.
Ian Davis, McKinsey’s worldwide managing director, hit the nail on the head last year.
“For some organisations, near-term survival is the only agenda item,” he said. “Others are peering through the fog of uncertainty, thinking about how to position themselves once the crisis has passed and things return to normal. The question is, ‘What will normal look like?’”
Looking back
What indeed does normal look like now? Let’s start by putting it into context and taking stock of the ‘old normal’ as it used to be. In my professional life, when I joined the industry as a starry-eyed 21 year old, 16 years ago, all I had ever experienced was up, up and up. I was still a student during the previous crash and so whilst I understood what had happened, I had no real-world ‘working man’s’ experience of what it meant to go through a severe economic down- turn. The recent turn of events has been a real shocker as well as an eye-opener. Whilst mortgage broking as we know it today had already established by the
18 mortgage introducer MAY 2010
time I had started, you still had your traditional IFAs whose attitude towards helping their clients with mortgages was that it was an inconvenient but necessary evil to put up with.
“ FOR SOME ORGANISATIONS, NEAR-TERM SURVIVAL IS THE ONLY AGENDA ITEM... THE QUESTION IS, ‘WHAT WILL NORMAL LOOK LIKE?’”
It wasn’t uncommon for some IFAs to just call the mortgage desk at the building society or bank branch next to their office and have it all done there by the local branch manager. No wonder then that the packager model thrived – an avenue whereby your traditional IFA could offer more than just one option
to their clients; have it all done for them and get paid for it to boot too. Mortgage sourcing systems were still fairly new. I don’t know how true it is but I had heard that at that time – mid to late nineties – Mortgage 2000 was operating out of a semi-detached house somewhere in the North West of England. Nevertheless, it was the likes of Mortgage 2000 who would say they were responsible for undermining the added value of packaging firms by providing the kind of intelligence and choice that made it easy for almost anyone in the industry to get involved. We then had the evolution of all things weird and wonderful: super- packagers like Private Label, with their Halifax-funded ‘Millennium Mortgage’ (2% discount for 3 years, 3% cashback with a further £1,000 cashback at the turn of the millennium, up to 95%); Bank of Scotland with their Shared Appreciation Mortgage; GMAC-RFC with their mortgage offers being issued within minutes of the credit score and needless to say, Northern Rock’s 125% scheme. We became really proud of the innovative and competitive streak of our mortgage industry and laughed at the Europeans with the rigidity of their counter-entrepreneurial rules that left little room for innovation and stifled writing more business. After all, in Europe they didn’t understand the
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