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Mehrdad Yousefi

Alliance & Leicester’s head of intermediary mortgages believes in an individual-based approach to business and he considers the market is going to hold up well in 2006 although one of the main themes for most companies will be on retaining existing customers. Interview by Nicola York.

Mehrdad Yousefi was born in Tehran but left in 1976 aged 13 when the Shah of Iran was still in power. Three years after Yousefi left, the Shah was driven out of the country in the final stages of the revolution.

With a background in corporate finance and commercial lending at Citibank, he has now been with Alliance & Leicester for over 17 years and has been head of intermediary distribution since early 2003.

A&L’s corporate strategy centres around providing good value products and recognising individual customer relationships, according to Yousefi. “We believe we treat everybody as an individual which is very important in this day and age because the market is so dynamic, anybody can go to any product provider so what is your unique selling point?

“I think our unique selling point is we are friendly and approachable and we have a compelling proposition for intermediaries.”

As the first bank to launch an online trading platform for mortgage intermediaries, Yousefi says this has been one of the keys to A&L’s success in intermediary mortgage distribution.

The company is aiming to move into the buy-to-let market this year and Yousefi says the decision was taken because the market has matured over the last two years and it is no longer considered to be a niche sector.

“We feel that with our powerful brand we can come into the BTL market and try and meet the needs of those customers who want to buy residential investment property.”

He considers the BTL outlook is “very encouraging” and hopes it is going to be as stable as 2005. On the subject of Chancellor Gordon Brown’s shock U-turn on property Sipps, he says: “We did not decide to come into the buy-to-let market just because Sipps were around the corner. We made the judgement because we felt this market is now mature.

“We do not share the view that all the hype associated with Sipps before the announce-ment in the pre-Budget report was going to manifest itself in a huge boom in volume of BTL business.”

Yousefi sees two strong themes emerging this year – retention of customers, which could reduce the size of the remortgage market, and an upward move in the specialist sectors.

Remortgaging will still dominate at least 45 per cent if not 50 per cent of overall lending in 2006, according to Yousefi, but he says market dynamics may change if more lenders try to stem remortgaging by introducing retention fees for intermediaries which could lead to a shrinkage in remortgage volumes.

It is not all bad news though. Yousefi is upbeat about specialist lending. “I see a very rosy picture in the specialist markets. I see the buy-to-let and the non-conforming market still representing probably as much as 15 per cent of overall lending and probably with every prospect of growing over the next two or three years.”

Although the FSA has done an “excellent” job on regulation, Yousefi thinks there are still areas for improvement – namely financial promotions and the standardisation of KFIs. “I am not sure whether the FSA has really homed in on looking at the financial promotions by both manufacturers and distributors, seeing whether they are flouting the letter of the spirit of the mortgage regulations set down.

“I guess the challenge as ever is the intense competition in the intermediary market and for product providers. And how do you actually grow your sales and actually maintain, if not improve, on your profitability in 2006 against a backdrop of a year where you had to adjust your business model and corporate regulation?”

As a keen private investor, Yousefi would love to be a hedge fund manager at a boutique in the future and says he “fell in love” with equities at an early age. He describes the current investment market as “sober and mature” compared with the 1980s and 1990s. Overall he is bullish on the outlook for 2006 and 2007.

Alternatively, he would like to run a property investment company and is enthusiastic about the prospects for property, saying real estate investment trusts will do well.

“I am very happy with what I am doing here and I hope we are building something special in terms of intermediary distribution in A&L in the market place.”

In terms of the future of A&L’s mortgage arm, Yousefi says the company are committed to the intermediary distribution and sees it as the “engine of our growth”.

Yousefi’s drive stems from wanting to make a difference and trying to please the customer. He is particularly proud of the integrated sales and service proposition for the intermediary market which the A&L introduced in December 2004. “It has been welcomed by the market and has validated our confidence that by providing an end-to-end service expense to intermediaries you not only gain their trust but you can also give them repeat business and quality service.”

Walking in the South Downs in East Sussex with his partner is a favoured leisure pursuit and he is also a fan of short city breaks or travelling anywhere exotic where he can browse museums and sample different cultures.

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