CFI: NACFB Generation X
Where are the next generation of brokers coming from? Adam Tyler, chief executive officer of the NACFB looks at the possible routes for new brokers to enter the market and the prospects for a brighter future
by Adam Tyler, chief executive, NACFB
The NACFB has noted a definite improvement in market conditions with new lenders entering the market along with the return of previously active lenders to the NACFB panel. With this more optimistic feel in the last few months, it will be interesting to see what the future holds in terms of attracting new talent and brokers in to the industry. The last few years has taken a
considerable toll on the commercial mortgage market, with many lenders and brokers exiting the market during one of the toughest times in economic history. Despite the numbers that have dropped out of the market, the NACFB can report a favourable increase in the amount of lenders returning to the NACFB database - from a real low of 42 at the beginning of 2010 to a significantly improved 65 as of mid April. With an increase in lenders and fewer brokers operating, it is clear that becoming a broker now is a good time to start, with lending gradually on the rise and less brokers in competition, the potential for getting in to the market is looking brighter. But where will the new brokers come from?
OLDER GENERATION It is fair to say that a large proportion of existing brokers in the commercial finance market have been operating for a long time. It is thought that the average commercial finance broker in the UK is around 50 years old. Due to the obvious
54 mortGaGe introducer MAY 2011
costs and time invested in training a younger broker, it stands to reason that many brokerage positions that are on offer tend to go directly to older brokers, who can draw upon their wealth of knowledge that they have accumulated. Whilst age is often an indication of experience, it is obvious that the market could also do with an injection of younger brokers. Without wishing to disparage experienced older brokers, it is clear to see that investment in a younger cohort could lead to fresher and perhaps more innovative perspectives, with a younger broker focusing on the future and how the market is today, rather than how the market used to operate. Perhaps the most traditional route to
becoming a broker was to come from an insurance or banking background. In the more prosperous times, the individual could learn the basics from the initial banking or insurance background and then access exams and training schemes that the company would fund. This route is now becoming less of an option, with fewer companies offering training schemes and funding the costs of exams and formal training. With cash scarce, it is little wonder that investment in younger brokers (and the educational costs that go with younger recruitment) is rarely seen as a worthwhile option. But inevitably, in order for the broker market to grow and thrive, younger brokers will have to start entering the market.
DRIVING UP STANDARDS With the lack of training schemes and exams offered by companies, it is vital that the broker has access to training and education elsewhere. The void that exists needs to be filled with adequate training to ensure that the next generation of brokers
can offer skilled and informed advice. As an Association, the NACFB can help to ensure that brokers are kept up to date with changes in the commercial finance industry and can provide routes to training and education days in addition to advice from other more experienced brokers within the Association. Essentially, a network of brokers within a trade body can share their knowledge and expertise for the benefit of the future of the industry as a whole. Quality over quantity is important within the industry and the brokers that are in operation now must focus on professional standards which can raise the profile of the industry as a whole.
HOW WE CAN HELP The NACFB can help brokers gain the necessary experience of the commercial market through various schemes. Our training and education days allow the broker to come along to a regional event to network with other commercial brokers and build important relationships which lead to a greater understanding of the market. These days also help the broker to build relationships with NACFB registered lenders, who can help and advise them with various deals they may not be familiar with. Additionally, the NACFB offers a
Continuing Professional Development programme and is also in the process of designing a bespoke qualification which will lead to a more informed understanding of the industry as a whole. So is now a good time to be a broker? Some certainly think it is, but we must bear in mind conditions are still tough and many a good broker may yet face an uncertain future.
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