Toni Smith, Sales Operations Director at First Complete

FR: Your network increased dramatically with 189 new advisers last year - why is it that advisers are coming to you rather than to the other networks?

I think they are coming to us because of a package of things that we offer.  In a growing market brokers want to grow their business, but in order to do that many find that they need support and guidance and that’s what First Complete’s ethos centres around.  We have a strong proposition with a strong management team and huge financial strength and backing from our parent company LSL Property Services.

It’s also well known that we have smashed all our mortgage and protection records last year, which is a huge draw as brokers want to be part of something that’s successful.
In a growing mortgage market where the intermediary’s role is growing, but where we have so many regulatory changes, brokers want to know that they can grow safely and compliantly.  We offer a comprehensive proposition and extensive field support in both sales development and compliance, last year for example we held over 150 meetings across the country, enabling the brokers in our network to meet lenders and providers and, just as importantly, to feel part of something. 

FR: What do you think the key issues are for mortgage advisers in 2014?

New regulation will be the biggest challenge and consequently having enough time to process cases.  I think that because lenders will have to publish so much more information on every product that they have that the range of mortgage products is likely to reduce in number and the MMR may force lenders to make products simpler. 

Advisers will have to get used to a new regulatory environment and new processing requirements.  Up until now many lenders have not been very forthcoming on how they intend to deal with the MMR which makes it harder to prepare for the changes – especially as the MMR could have a negative impact on some clients who may no longer be able to get a mortgage or may have to accept a smaller one.

For brokers it will be really important to have the right business model in place to cope with the changes and the right staff to meet the increase in customer demand we are experiencing at the same time as facing longer advice times.

FR: Do you think that the MMR will increase or decrease the need for networks?

I think it will increase the need for networks as more than ever, brokers will need guidance and help to be kept safe and compliant. Some lenders will not train their staff to the required level to become mortgage advisers and so they will become much more reliant on brokers.  If branches can’t provide face to face advice more people will turn to brokers and we expect market share to move in favour of the intermediary.

It is a key requirement of the MMR that lenders will have to publish their criteria, but it is not yet clear where they will publish it or how they will disseminate it, for example, will it just be on a lender’s website, on a sourcing system or distributed some other way?  This is a very big question and I believe that it is likely to increase the need for networks as brokers are likely to need more help.

If you are a DA, especially a smaller one, you could be left in quite a precarious position, trying to interpret the regulations and all the criteria and requirements from every lender, with a high risk that you might inadvertently get it wrong.  While many DA firms use outside compliance firms, the challenge is, how do you get the right compliance outsourcer and how do you know that they are giving you the right information?  A network is your only answer to get it completely right as they will have dedicated staff, be prescriptive and what is compliant and monitor your business to keep you safe. 

There probably won’t be a massive influx of brokers into networks immediately, but I think that it will increase over time as brokers start to fully understand the impact of the regulation on their business.

FR: Do you think that proc fees linked to quality is a good idea?

Yes we think it’s a great idea.  What can be bad about reinforcing behaviour that’s in the client’s best interests?  However we do need the lenders to share their quality matrices with the network so we are not working in the dark; transparent and reliant management information on both sides means that we can all work to constantly improve quality.  It also means that if, as a network, we can see that business from a particular broker is being submitted at a lower quality then it should be then we can see what they are doing wrong and address their training needs to bring them up to the standards required by the lender.