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Confidence… We all need it, but how much of it is out there currently? And are brokers fully utilising the options available to them? I think not...
Now before anyone gets offended, I don’t think all brokers are ignorant… well some of them perhaps… but it is very clear to me that brokers are not confident enough to seek alternative means of finance. Whether that’s ignorance you decide.
However, this cannot be purely down to just the brokers as, like with anything new or in times of hardship, guidance is needed. Therefore education is crucial to this.
New faces are attending industry events to find out more about specialist finance, which is great, and some who have been in the industry before are about to come back into the market. Clear signs that there is confidence in the industry, which brokers need to pay attention to.
Brokers I speak to tell me that second charge deals are their bread and butter in regards to income, and areas such as bridging finance is their bonus. Short term finance is clearly very lucrative, especially in the eyes of the investors on the yield front. That's why one sees new lenders entering the market today. Bath & West launched for example on Monday.
However, the simple fact remains, alternative finance is booming and more and more brokers are using this route. The CBI even recently launched its 'Ripe for the picking' guide to sourcing alternative finance, such as peer-to-peer lending.
Vincent Cable hailed the move, but is the government tagging on to an industry, which is already booming, to increase the confidence we have in the government in correcting the mess that has been left by banks and irresponsible lending? I think possibly. The time of “Too big to fail” has surpassed I believe but are certain institutions “Too big to manage?
Details of government initiatives such as DBIS's Business Bank are still not complete and will not even be fully operational until autumn 2014.
Lenders, distributors and the media have to keep helping the cause by continuing to create seminars and roadshows. It's a bit of a taboo subject, as the more you advertise your services, the more demand you will obviously receive. However, many lenders shy away from stories and indeed new introducers to an extent if their operations are full to capacity. A good sign, but does this put brokers off from approaching lenders? Who can’t facilitate funding for their clients or indeed ‘string them along’ until the final application hurdle.
A big missing key in the industry I strongly believe is the education that networks send to their members in regards to specialist finance. You need to educate your brokers! The best way they can fulfil their jobs to their clients is by knowing as much about the finance options available to them… even if it after they assess it and realise it’s not for them. If you’re reading this, you know who you are, get in touch!
BoE data published this week also highlighted how much the high street is retracting net lending with the funding for Lending scheme, with Lloyds, RBS and Santander reducing net lending by £4.9 billion in 2013 Q1. I know they’re fixing their balance sheets and making operational efficiency cuts, but where are they seriously putting the money… Challenger bank Aldermore was the sixth highest net lender in the quarter with £230 million.
Recent statistics looking at property debt burden has seen a decrease, showing that people are getting more confident in terms of the property market. The construction and manufacturing industries is on the rise and the help to buy scheme seems to be kicking in with 72,900 first time buyers flocking to the market from January to April.
This is the best possible start for the incoming Mark Carney as Governor of the Bank of England as the economy is seemingly firing on all cylinders to the road to recovery.
I was recently part of the B&C Awards judging panel last week, and I have to say some of the testimonials received were excellent and fully highlight the professionalism within the market. However, some of the nominees didn’t even bother to send in any testimonials, which I have to say is shocking.
Anyway I digress... brokers do a great job, but can do so much more. If you're a broker and aren't sure about the industry, lenders or diifferent products get in touch or phone a lender today. Hesitancy or lack of wanting to learn is not good and does come across as ignorance to an extent. Everyone can learn and improve no matter what field you're in.
Stay tuned with B&C for the latest news. Next week, we have some breaking exclusive news for you on the product front.
In two weeks we host our Awards at The Grand Connaught Rooms, a time where we can celebrate the huge success story this industry is creating from a ‘cowboy’ negatively perceived industry, to one in which is becoming integral to a brokers’ arsenal.
Have a great week and get in touch.
Jason
Email: [email protected]
Twitter: @JasonMcGeeAbe
Confidence… We all need it, but how much of it is out there currently, and are brokers fully utilising the options available to them? I think not.
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