The UK economy has many quality small businesses – we as brokers know that – but with competition high amongst finance brokers, it is important to stand out more than ever now, by understanding clients’ needs to deliver a detailed personalised approach.
In this climate, a generation of brokers running their own firms are approaching retirement, and before a gap that cannot be bridged starts to form, the services they bring must be appreciated, supported and continued long after they leave the industry.
Current market conditions
The current economic climate presents significant challenges for SMEs, with inflation, interest rates and securing approval from larger financial institutions all on the mind of business leaders.
In these conditions broker firms supporting small companies have a vital role to play ensuring SMEs can access flexible funding and take advantage of emerging growth opportunities or refinance to avoid cash flow challenges.
Brokers approaching retirement or leaving the market
However, with the average age of NACFB brokers standing at 45, and almost 2,000 broker firms led by someone over 65, according to our Red Flag Alert data, there will be a wave of experience leaving the industry soon.
The shrinking pool of brokers this will create is exacerbated by the number of financial services firms that have already left the sector – brokers amongst them – through solvent liquidations. In 2024, there were 839 solvent liquidations in the financial services sector, a 29% increase on 2023 (650).
It is becoming more urgent to ensure that when brokers owning their own firms leave the industry, the service their clients receive continues. And this means fully understanding the detail that smaller broker firms deliver.
The role of the small broker firm
For smaller businesses the size and local focus of these broker firms, can often mean personalised guidance backed by experience and expertise. Their deep understanding of individual clients ensures SMEs have access to tailored financial solutions, enabling them to act upon their objectives whilst navigating the external economic environment.
Historically, we have seen that these firms have the quality to understand the finer details of their clients, and have long-standing relationships with them as a result. It is this length of relationship that help the broker arrange affordable finance for a business.
Many of these brokers have a lender-agnostic approach and form established relationships with alternative lenders. This means being able to quickly identify funding options beyond the traditional high street banks and opening doors for businesses that might otherwise fall outside standard credit criteria.
This flexibility is vital in a market where many SMEs need competition between refinancing or new capital providers to survive and grow.
Quietly driving the UK economy
The work completed by these brokers doesn’t just support individual businesses. They play a crucial role in the broader economy.
By supporting SMEs with business finance solutions, through a combination of speed, long-standing relationships, access, and expertise, smaller brokers quietly drive the success of countless SMEs, contributing to job creation at small companies, innovation and overall business growth making them the unsung heroes of keeping the UK economy moving.
Continuing the legacy of service
With a generation of small broker firms approaching retirement, and others choosing to liquidate their company voluntarily the pool of experienced brokers is shrinking. As part of that pool, the gap that one and two person broker firms leave cannot be ignored. And until promising brokers start up on their own, or experienced bankers enter the profession, a number of businesses will be wondering where they turn next. Through offering ‘broker partnerships’ with small brokers who want to retire, we want to bridge that gap, not only supporting brokers, but continuing the client service legacy they have established for years to come and helping the UK economy grow.
