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Charcol seeks sub-prime slice

Managing director Peter Barrett says after breaking free from B&B and regrouping, the firm is setting new goals

John Charcol will be entering new markets this year and is lining up an assault on the sub-prime market as well as putting a significant focus on recruitment and expansion.

Major growth in the sub-prime sector has prompted the firm to expand its product offerings in this field.

Savills Private Finance’s ann-ouncement last year that it will be entering into the non-conforming arena prompted John Charcol to train all its advisers to deal with sub-prime.

Managing director Peter Barrett says: “There will be a major drive into this sector. Training has been rolled out for every single consultant. We will also be looking at appropriate product design for this area.”

This will include products that encourage clients to pull themselves out of debt so they can be recategorised as near-prime and prime candidates after a two-year period.

Continuing on the theme of debt consolidation, John Charcol is also looking at entering into individual voluntary arr-angements to help clients create viable budgets to repay creditors. This is hoped to be on a no-fee basis. There are no plans to enter into the equity-release market yet and John Charcol will continue to refer cases to equity-release specialists.

Barrett says: “I am not yet comfortable with this area of the market. We are actively discussing where we can go with this but until I am satis-fied with how we can go about this, you will not see us enter this area.”

However, John Charcol is considering moving into commercial lending and is pursuing opportunities in the overseas mortgage market.

The additions to the John Charcol product suite follow a period of reconciliation at the firm dominated by the clear-out of underperforming consultants and restructuring since it broke free from Bradford & Bingley in 2004.

The main change this year will be the creation of John Charcol Associates. The subsidiary has been set up for experienced advisers who want to work on a self-employed basis but with the firm’s support.

Barrett says: “Our first year since leaving Bradford & Bingley Group was about fixing the business. This meant a massive clearout of underperformance and a restructure of management. We identified the really good quality people and made a decision as to how to retain them while they can exert their independence.”

The theory behind the move is to retain high-performing advisers who could start off at multi-tied phone advice service Charcol Direct.

Advisers can then graduate to independent advice arm John Charcol and become an asso- ciate. This should offer some stability for the firm which saw a series of brokers leave for rivals Hamptons International and Savills last summer.

The clearout at the group has also resulted in some of the old guard coming back into the fold. Ian Darby, who rose to become managing director of John Charcol in 1999 and group commercial director at Bradford & Bingley, has returned to the firm as chairman.

Charcol has around 100 advisers compared with 200 in the B&B days in 2004 and Barrett is looking to recruit 50 advisers in the short term. There will also be a focus on geographical expansion. Canary Wharf has 10 consultants but Barrett believes this team could double. The phone channel will also grow to double its current size in the first half of the year.

Barrett says: “After a year of sorting ourselves out, we are entering a period of real growth and expansion. The focus is on creating a firm in which people can train to become the best they possibly can be.”

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