"The word ‘education’ grates on most mortgage advisers now so it’s more about increasing ‘engagement’ with seconds."
We spoke to Daniel Yeo, founder and managing director at Specialist Finance Centre, about the packager's intermediary offering, if and how second charge lending can break through into the mainstream, and how brokers can increase their engagement with seconds.
FR: Tell us about Specialist Finance Centre, what you offer to advisers and where you can support them?
Specialist Finance Centre (SFC) is an intermediary-focused specialist finance packager. Our core product is second-charge mortgages and we also have dedicated bridging finance, commercial and buy-to-let mortgage advisers so we are well-equipped to live up to our name.
We take referrals exclusively from intermediaries, typically mortgage and financial advisers but also commercial brokers and accountants. Our focus is on client outcome and creating long-standing relationships with our introducers. We do this by living and breathing our core values: integrity, collaboration and determination. We are the silent arm to introducers’ businesses, there when needed for specialist cases so they can focus on their core products
Our own advisers are a mix of experienced and nurtured talent, this creates a good balance across the business and allows us to continue with our growth plans.
FR: The master broker space seems like a highly competitive one. How do you differentiate yourself from others in this space?
It is highly competitive, but we have been patient with our growth plans and are executing them at the right time to guarantee success with new introducers. We have ensured we have cutting edge IT, telecoms and CRM systems, coupled with a strong client and introducer-centric culture.
Our advisers are heavily targeted on compliance and quality control. With our emphasis on speed and service alongside generous revenue splits we provide the perfect balance for introducers.
Having worked exclusively with introducers for 15 years I feel I know what they want, their feedback is always along the lines of, “service, looking after their clients and fair revenue splits”. It’s easy to lose sight of that as companies grow - we have benefitted from others losing sight. As we enter our fourth year of trading, SFC will always act with the hunger of a business in its first year.
FR: You offer a proposition called SFC Solo - what is different about this offering and how does it support self-employed advisers specifically?
Most self-employed propositions come with the promise of huge financial success and lead sources. In reality this means, work your backside off speaking to clients who aren’t really that interested, and you must really work the numbers to get it to work. Support is almost non-existent apart from chasing up of managing information and figures; that’s not support that’s micro-management which is against the grain of being self-employed.
I’m of the opinion that if you can’t generate your own business then self-employment perhaps isn’t for you. If your firm is providing your leads and managing you, then you really should be employed.
I was self-employed in the past prior to taking on staff. It can be lonely and tough without the right people and firm behind you. This experience taught me what’s important for self-employed people - freedom and independence definitely, but you also need support.
Support doesn’t mean leads and being chased and managed, it means solid infrastructure and excellent lender relationships, for example. The employed side of SFC has these things in abundance so we just branch it out to the self-employed advisers while maintaining their own identity. We offer a very generous split to regulated and non-regulated advisers but perhaps equally as important is our employed head office can look after the regulated and non-regulated referrals those advisers either don’t specialise in or aren’t qualified to do.
FR: There appears to be a lot of ‘noise’ around the second charge market and a lot of talk about it being a breakthrough year for the product. It is still however very much a niche sector – what needs to happen in order to make that breakthrough into the mainstream? And is this even desirable?
I have been banging the drum for a long time as have a lot of other people, some for far longer than me. The word ‘education’ grates on most mortgage advisers now so it’s more about increasing ‘engagement’ with seconds.
You can do this by taking advantage of different mediums, be that face-to-face, Zoom/Teams, social media, phone, email, seminars and workshops. Rather than boring the mortgage advisers, simply discuss their business and then both parties will realise where the opportunities are for seconds.
There is now a marked increase in awareness of second charges among the mortgage adviser community, some even arrange seconds themselves and good luck to them. My aim is simple, second charges need to be presented as an option to clients when looking to capital raise and pro-actively marketed by advisers. It’s only desirable to be mainstream when it’s the right advice; you can’t grow beyond what is the right thing to do. Conversely, I do believe there is far more to come for the second charge world.
FR: What career path has brought you to Specialist Finance Centre? What excites you about specialist finance market at the moment? What can it offer advisers who are not particularly active in this space?
Honestly, like most (if not all) I didn’t think about ending up in the mortgage industry but I’m glad I have. It just happened naturally after securing an entry level role in 2007. I have always had ambition to employ people, to develop people and to create a life as close to my own terms as possible.
The exciting thing is the removal of blinkers regards second charge mortgages by advisers and clients, lenders innovating almost weekly with new ideas and products, companies beginning to collaborate with each other and the evolvement in tech provision.
If you aren’t currently embracing specialist finance products, then you need to at least consider them. No one is expecting you to advise and arrange them yourself. Establish your model in terms of what you do yourself and partner up with the right packager for you.
FR: How did you find lockdown? Has there been anything specific that you could not have done without?
As my wife is a deputy headteacher who needed to be active in her community during lockdown, plus four young children to look after plus my ‘fifth child’, the business, it wasn’t a walk in the park and unfortunately you’re never far removed from people who have suffered because of Covid.
I used the period to focus on where SFC is going and I’m proud those plans are coming to fruition. I’m a simple man so the only thing that I couldn’t live without are my wife and children. Everything else is just tinsel.
FR: What do you see yourself doing next?
I don’t currently see myself waking up one day and saying SFC is where it needs to be and I need to move on, so it has my full focus, it’s my now and tomorrow. I will continue to drive its growth on the employed and self-employed side while looking for new opportunities linked to SFC. We want to be known as one of, if not, the most respected B2B packagers out there. So, until I wake up one day and say that’s it, I can’t do any more, I’m happy with the journey we’re all on.