Cover In the driving seat


The mortgage industry is on the brink of a recruitment crisis as graduates shun the once lucrative world of broking. Putting recruitment in the fast lane should be a priority. Sarah Davidson investigates what’s being done


September used to conjure images of dusty books and pencil sharpenings at the bottom of an old school desk. Now school has been sexed up. Just look at Britney in her infamous debut video and those all new St Trinian’s school girls strutting their stuff in Trafalgar Square. It should be back to school time for mortgage IFAs and brokers too (though I rather think minus the miniskirts) but as an industry we seem to have neglected our duties on that count in recent years. Robert Sinclair, director of the


Association of Mortgage Intermediaries, raised the issue of the lack of new blood in the intermediary sector during his address at the AMI annual dinner back in June, and it has since been a topic of conversation with many others in the industry. It’s not a new issue. In 2007 the


Financial Services Authority’s “Financial risk outlook 2007” estimated the average IFA age at 46, but industry consensus suggests the average age is closer to the mid-fifties. The FSA statement at the time said:


“We do accept that the industry may be failing to recruit and retain new talent. Recruitment in advisory firms commonly targets existing practitioners in rival organisations instead of attracting new talent to the sector, which could eventually lead to shortages of advisers.” Unfortunately, the regulator has yet to


update its view on this but the sentiment still rings true. There’s a risk to the industry


and very little co-ordinated effort to address it. Keith Richards, distribution and


development director at Tenet, undertook some exclusive research for Mortgage Introducer and following the assessment of 5,500 brokers and IFAs, discovered that the average age of an IFA is 53 and 47 for a mortgage broker. But it’s not just the high average age


that’s a problem. It’s the number of brokers disappearing and it’s a point made by Alan Snowball, head of Countrywide’s financial services division. “Over the last 18 months we have seen


over two-thirds of the broker market disappear, leaving far fewer opportunities for new recruits to come into the industry,” explains Snowball. “At Countrywide we are seeing a variety


of age groups from both genders applying for vacancies, although there is a reduced number since the boom period.” Katy O’Neill, a partner at national


mortgage recruiter Kingston-Knight Consultancy, says she is seeing the same trend across the market. “Two and half years ago there was a


real burst of activity for people aged between 19 and 25 coming through the system as CeMAP trained advisers,” she says. “At the height of the market when sub-prime was rife firms like Kensington, TML and Interbay were offering very flattering salaries and the market for younger brokers was huge.” But like Snowball, O’Neill says the


22 mortgage Introducer SEPTEMBER 2010


recruitment tap was turned off abruptly. “When the credit crunch hit, that rush of


people just stopped and no-one was being trained into the industry at all,” she adds. The market has already seen the


number of advisers plummet from around 33,000 to an estimated 12,000 as the mortgage market reeled after the credit crunch. Now with yet more regulation proposals from the FSA, the approved persons list and an increasingly rigid approach to conduct regulation in the mortgage market, barriers to entry are rife. If the sector is to survive, it has to seriously consider where the future talent is going to come from, and it has to do it fast.


New blood John Cupis, managing director of network Sesame, says the lack of new blood coming into the IFA market is cause for concern and needs co- ordinated action. “We do recognise that new blood coming into both the IFA and mortgage broking markets is an issue,” he says. “I think the IFA market needs more


urgent action than the mortgage broking market as the average age is older for IFAs, but mortgage broking won’t be far behind,” says Cupis. “As the largest IFA business in the UK it’s certainly something we need to be thinking about more seriously. Particularly as there’s also the looming issue of the Retail Distribution Review which has a big


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