FR: How are you finding current market conditions?
Current market conditions are actually extremely encouraging. The second charge market went off with a bang this year, first of all with the ground breaking 90% LTV products, closely followed by an incredible increase to 95%.
The same can be said for unsecured loans too. Six months ago the lowest APRs were in the 6%’s, but as competition for the top spot has tightened, rates have dropped further and we now find ourselves completing unsecured loans at as little as 5.1% APR. It’s an extremely encouraging sign that the loans market in general is rapidly growing.
FR: Do you think introducers and brokers are getting the support they need?
The support is certainly there to be had; the biggest challenge I’ve found is helping our introducers and partners recognise the need and the opportunity. When I ask the question “How do you deal with personal loan enquiries from your clients?”, the most common response tends to be either “We don’t” or “We refer them to their bank”, but this is a lost opportunity.
In fairness, the intermediary market is very limited when it comes to sourcing unsecured loans because most master brokers only offer mid/sub-prime rates, which means it’s not a viable option for a whole of market adviser. My role is to get out there and spread the message that intermediaries can introduce their clients to the lowest rates in the UK and also earn income at the same time - they just need to know where to look.
FR: Secured loans have seen climbing lending volumes month on month - has the number of secured vs. unsecured loans altered significantly for you?
You are quite right and there is certainly no doubt that lending volumes are on the up. Following the rise in LTVs available from secured lenders, we’ve seen a dramatic increase in the number of advisers sourcing loans for their clients through The Lending Wizard. That said, it may be surprising to hear that personal loans are not suffering in comparison. The ratio between completed secured and unsecured loans has remained quite static, owing to the intensely competitive market conditions, favourable interest rates and increased activity in the intermediary arena.
FR: What challenges do you feel brokers are facing in light of current market conditions?
The mortgage market is challenging at the best of times. As advisers are battling with stricter lending criteria they have to cast their nets much wider than usual in order to find a solution for their clients. The re-mortgage market in particular is tough and many advisers are uncovering a great number of existing clients locked in to incredibly low life time or interest only products, where releasing further funds anywhere other than their existing lender is not a favourable option. In these cases a further advance may not always be best advice, so sourcing a secured or unsecured loan should be a natural consideration.
FR: How do you stay competitive in such tough conditions?
That’s simple - we focus on what we do best and do it even better. We are continually expanding our lending panel to provide advisers with more choices (watch this space for more news on that), and our technology is always evolving to match the changing needs of our intermediaries.
We believe it’s essential for an adviser to have access to all the possible solutions for their clients, and that the information they base their ultimate recommendations on has to be as accurate as feasibility possible. That’s why our comparison tables are more than basic quotations, each result is an agreement in principle and has been fully credit scored and underwritten by each lender. In our opinion this is the only way an adviser can make an informed recommendation, knowing with confidence what outcome lies at the end of each an every path.
FR: What is The Lending Wizard’s greatest achievement in the last year?
2012 was a fantastic year; we relocated to new offices near Manchester Airport at the start of the year and then had to double our space again in December to cater for a further significant growth in our head count. It was also a great year on the new business side as our number of registered advisers literally doubled year-on-year. To cap it all off February has been yet another record month for loan completions and it all looks set to continue.
FR: If you weren’t in financial services, what would you be doing?
I suspect I would be a teacher. I had a very musical childhood and married into a teaching family. After my A levels I went to a music conservatoire and gained my degree as a pianist. So, if I wasn’t here now, I’d probably be teaching a year 12 music lesson somewhere!
Gareth Broome is a financial services professional having spent many years developing his knowledge of the mortgage, protection and secured and unsecured loans arena. An IFA qualified to level 3 standard, he is also an experienced Account/Business Development Manager specialising in the intermediary sector.
