Bradford & Bingley commercial director Ian Darby is starting to relax after overseeing the £10m transition of B&B's branches into independent advice centres.
The Marketplace at Bradford & Bingley launched two weeks ago supported by an intensive marketing campaign poking fun at the lack of product choice available from other providers.
Darby, clearly relieved the launch has gone to plan, predicts The Marketplace will process £5bn-worth of mortgage applications by the end of the year. As the former managing director of Charcol, acquired by B&B last February, Darby played a pivotal role in shaping The Marketplace project from its inception.
Although B&B already had one foot in the mortgage broking market through estate-agency chain Black Horse Agencies, Darby says the move to independent mortgage broking was still a tall order.
He says: “It was a substantial task but B&B had long been committed to this strategy and Charcol helped to accelerate the process. My job was to make sure that all our customer propositions could stand up to a new brand launch.”
Darby is quick to play down rumours that Charcol could be rebranded under the The Marketplace banner.
He says: “Never say never but there are no plans to rebrand Charcol. It is just not our intention. Charcol and The Marketplace are being run as separate brands because they appeal to different areas of the market.”
Charcol will continue to chase midto high-net-worth clients through its 11 bran- ches and over the internet, which Darby says will explode in popularity over the next few years. With only a tiny branch network, Charcol has to look online for its main source of revenue.
Darby estimates around 20 per cent of mortgage borrowers research loans online and then go to an IFA for help. Darby says these are the kind of borrowers The Marketplace is targeting.
“The internet case is now clearly established. There is a huge demand for online mortgages services. From the group's perspective, it is critical that we win that game,” he says.
Ever tightening margins and cut-throat competition in the mortgage market has prompted small and medium-sized lenders to offer the products of rival lenders.
West Bromwich Building Society has a panel of providers whose products are sold through the society's branches and Newcastle Building Society acts an agent for sub-prime lender Kensington.
B&B currently has 37 lenders on its panel and offers a range of first-time-buyer mortgages under the B&B brand.
Darby sees the move as a test case for lenders looking for new ways to wring a profit out of a market which is bleeding itself dry.
He says: “If margins continue to be squeezed, many in the industry will be interested in how we get on, from the stockmarket to our competition. I am sure that B&B will not be on its own for long in doing this although the barriers for entry are prohibitive, with training, equipment, technical support, product development and online capability all essential.”
Charcol clearly played a key role in this respect for B&B but Darby believes it depends on a lender's strategy as to whether it is better to buy an established IFA or start from scratch.
A major advantage of acquiring a national IFA is the buying power which comes with it. B&B will be responsible for product procurement for both brands but can rely on the financial muscle of Charcol.
Darby says: “Charcol had big purchasing power but now the group can go into bat with the collective buying power of both brands to ensure we can offer the best rates.”
Charcol also influenced B&B's decision to equalise commission for its advi-sers, perhaps the one hint of controversy surrounding its move into independent mortgage broking.
Although the bank's advisers are paid the same regardless of what product they sell, the existing terms of remuneration between B&B and its providers remains the same.
But Darby points out that Charcol capped commission rates and procuration fees for its advisers six years ago and views the move at B&B as a natural progression.
He says: “There has been research to suggest there exists some commission bias among IFAs. Even though there is no evidence of this at B&B, we thought it was obvious to eliminate any potential bias and make the change anyway.”