View more on these topics

Constructive thoughts

Commentators are already predicting that this year will fall into two distinct trading periods. The tougher market conditions we are seeing will continue well into the summer despite the recent bank base rate cuts.

Lack of liquidity poses the greatest challenge as lenders seek to consolidate their position. This means there will be no easy solution for borrowers, nor for brokers who would traditionally use quieter housing markets to focus on remortgages and debt consolidation.

It is not only lenders who are cautious. Anecdotally, a picture is emerging of ridiculously low valuations which are having a big impact on the funds available to borrow.

From lenders to providers and estate agents to brokers, there have already been casualties as businesses review their models. Again, the greatest casualty is likely to be the first-time buyer. This critically endangered species features high on new housing minister Caroline Flint’s agenda, with more affordable housing being seen as the solution.

I cannot get my head round this thinking. Demand will always outstrip supply and therefore there will be competition – and surely a premium – even for affordable housing. But I digress.

I would urge you to use this period to reorganise your business to enable you to ride out this storm and be more constructive when the market turns. A year that is back-end-loaded can still be profitable if you focus on the core, profitable part of your business and work the whole client bank. After all, there is no one better qualified to support clients who are in the grip of what Breakfast TV described recently as a mounting debt crisis than the professional, experienced mortgage broker. As students of the market, rather than graduate bank employees on fast-track management training, they should be better qualified to advise and support clients who are having credit difficulties.

Today’s trading conditions call for a different skill set, different competencies and behaviours. Debt and credit difficulties lead to embarrassment and you will need to manage your clients more sensitively when probing their liabilities. You will also need to reassure clients about the deal they are getting when they they think a rate cut is just round the corner.

Finally, you need to be ruthless. Make a critical assessment of what you do day in and day out. Then make sure it adds value and takes advantage of all the help available to you, such as the business development support and advice available from your network or club.

Recommended

Volatility opens up a valuation gap

Early gains last week in the FTSE 100 were dampened by fears of an American recession.The Aggressive, Balanced and Cautious Adviser Fund Indices all rose as London’s leading share index crossed back over 6,000. Stocks were buoyed by increasing activity in large scale mergers and acquisitions.Having dropped 12.17 per cent in the first three weeks […]

Clegg promising independent advice on repossessions

LibDem leader Nick Clegg has promised to make financial advice compulsory when repossession claims are issued.Clegg insists the advice would have to be indepen-dent, whether provided by the Citizens Advice Bureau or IFAs, but has not confirmed who would foot the bill.Speaking to a City of London audience last week, Clegg said if the rise […]

Offer to securitise £12.5bn of Rock loan

Royal Bank of Scotland, Barclays and Citigroup have offered to securitise £12.5bn of the Bank of England’s emergency loan to Northern Rock.

Bankhall joins Adviserwise registration service

Bankhall is signing up to the Adviserwise agency registration service launched last month by e-standards body Origo. Set up to help advisers form trading relationships with multiple product providers, the service is currently backed by four service providers and 12 product providers. Origo says so far 467 submissions have been issued with participating product providers […]

DB transfers – one more factor to consider

Jim Grant – Senior Product Insight & Technical Support Analyst We look at how higher DB transfer values could cause a lifetime allowance issue and how that affects the advice process. Advisers are receiving an increasing number of requests from clients looking to transfer their pension from final salary schemes to personal pensions. This is a […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com