"If anything the pandemic has consolidated the role of the broker and intermediation appears to have now fought off everything that has been thrown at it over the past 20 years."
FR: What are you seeing in terms of recruitment within the industry?
It is fascinating to see the turnaround in the mortgage world in the past 12 months. This time last year most advisers were wondering if they would ever work again. Fast forward to today and the broker is in a very strong position and back to dictating terms. I would add a word of caution here and suggest that, just when everything appears to be going well, that this is the exact point that brokers need to take stock and think carefully about the future. Within TMG we are seeing some strong geographical movement of advisers, with those in the North seemingly to have itchier feet than their counterparts in the South. In addition, another fascinating change caused by the pandemic is the fact that many principals have taken the opportunity to look at their numbers and are possibly asking questions about matters that maybe were not in the vocabulary pre-pandemic. Throw in a surge of brokers who are now thinking about going it alone and I think we are witnessing some major tectonic plate shifts the likes of which we have not seen since 2008.
FR: Are you seeing a trend toward more firms seeing direct authorisation or is the network model gathering momentum?
This is a very interesting one actually. We get calls every week from principals of AR firms who have fallen out of love with their current set up or structure and are looking for guidance about their next move. We are clearly in the DA space but we are also pragmatic with people and often suggest that there is no point moving just for the sake of it. The main issue we are seeing is what we call the industry 'Stockholm Syndrome'. By that I mean the advisers have been convinced for years about certain arguments concerning DA versus Network that they are convinced to the point of being brain washed. We hear the same concerns we have heard for years - spiralling FCA costs, limited lender availability, the regulator camped on your lawn. These are misconceptions, misnomers and misleading. All we want to do within TMG is bring some balance to a previously heavily weighted debate.
FR: Is there a way for the industry to collaborate better to help advisers with these difficult career decisions?
Contracts around AR exits need to be less onerous, less heavily weighted on the side of the network. The way some advisers are treated when moving away from their network contracts is appalling. Real heavy-handed clauses that they are made to adhere to, even though often the only reason the AR wants to leave is that the goalposts have been moved by the network in question. We understand that the network needs to negate all future risk, both financial and complaints based. However the networks have all the power here in terms of being able to turn an advisers’ income on and off through pipeline freezes, which means brokers risk everything by legally challenging these onerous contracts. It just doesn’t sit quite right with me. At TMG we have worked really hard to put process in place to allow AR firms to exit networks and become directly authorised, and we are skilled in facilitating this transfer so advisers have negligible downtime to be able to advise their clients. Ny following a set process and with some safer6y nets in place it can be achieved with no downtime in being able to advice your clients, but it really is David and Goliath stuff.
FR: Do you see any significant industry developments post-pandemic?
Without question, although some of them may not become visible for a number of years. If anything the pandemic has consolidated the role of the broker and intermediation appears to have now fought off everything that has been thrown at it over the past 20 years. Aside from an asteroid strike I am not sure what more evidence we need to suggest broking is here to stay. That said, it will need to evolve. Many aspects of the job are still the same ones we have been undertaking for years. Communication is changing and business is changing with it, we have to acknowledge that or smug apathy is what will trip us up. We believe that consolidation will, at long last, arrive on the broking shores, we are about 15 years behind our IFA brethren in many respects but I think we can learn a lot from the journey they have been on in that time. Size will matter going forward, the world is coagulating in to bigger, more visible, better capitalised businesses, the secret for commerce will be to find the balance between that and still offering the consumer a choice.
FR: There has been a lot of talk about office working versus home office, what do you see happening in that regard?
We hear stories of resignations from firms who have recalled their advisers back to the office, as they search a permanent home based role so they can look after the new puppy. But for many brokers they won’t have seen much change, many have been working from home for years. The issue may become more sensitive for larger businesses who’s model has traditionally been the large open plan office in the heart of a city. As with most things, TMG will always seek the middle ground so we embrace and encourage the adviser or principal to adopt a flexible working approach but will also support and commit to them if they feel that a physical office is something that will help the develop and grow.
FR: You recently joined TMG from a large network. What is it that you are hoping to achieve in the next 12 months, individually and as a firm?
My remit is two fold. Firstly, help recruit the very best advisers who now wish to develop their own brand under our umbrella, where they get the freedom to grow and enhance their business and income but with the safety net of a committed and progressive marketing company behind them. Secondly, to help the existing brands within TMG to now really push on and plant their own branded flag in a hill that they are prepared to sweat blood for. That’s a huge part of the TMG offering, we believe in the adviser, we believe they can be better and we believe in our business model. We are lucky enough to be able to have created a bit of a hybrid, where our brands – although all separate businesses – benefit from being part of a larger group dynamic. My brokers mean the world to me, I understand what makes them tick and I have one main goal – to make them more successful. I’m very lucky to be able to work with them.
From a corporate perspective, the growth plans are just phenomenal. We have refined what we are all about and the offering is, without question, unique and with parallel in the sector. The principal owns everything apart from the name. Hopefully this will go someway to alleviating the problems mentioned earlier, we offer freedom and ownership with support and collaboration. We know it won’t appeal to everyone but we then only need it to appeal to 50 of the right-minded people for it to succeed.