Mortgage Broker Broadcast
Developing your knowledge to help you build a successful Mortgage Broker business. Craig Skelton shares his thoughts and experiences on all aspects of mortgage advice covering everything from operating in the banking world, estate agency based advisers all the way up to working as a self employed broker. He will be joined by experts from within the industry and other business sectors which all play a key part in becoming a successful mortgage broker in the modern world.
Mortgage Broker Broadcast
Build Value Or Vanish: Future-Proof The Brokerage
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Headlines about AI in lending can feel distant—until lenders start engaging your clients directly, trimming PT procuration fees, and hinting at new retention tools. We tackle the real-world implications of the FCA’s advice trigger change and the growing possibility that product transfers become leaner, faster, and less profitable for brokers who treat them as a business model. Our goal isn’t fear—it’s focus. We break down how to adapt now, so your revenue and reputation aren’t at risk later.
We dive into where human advice holds its ground: later life lending and equity release, bridging, second charge, and complex scenarios that need judgment, not scripts. We look at how AI will likely compress admin and accelerate decisions, freeing advisors to do the human work—listening, educating, planning—that actually drives client loyalty and better outcomes. We also borrow from wealth management’s playbook: schedule annual reviews, diarise protection follow-ups, and turn single transactions into long-term stewardship. This shift from order taking to ongoing advice is how you defend your client book and make Consumer Duty a competitive edge.
If you’re thinking about firm value, we get practical: build a GI book with renewal stickiness, move part of your protection commission to non-indemnity for recurring income, and create a simple, consistent 12-month client communication plan. Buyers pay for predictability, not personalities. We share a starter framework for new and evolving brokerages—pick two or three defensible specialisms, treat your website and social as a clear shop window, invest in systems that record meaningful data, and commit to product density so every mortgage links to protection, GI, and signposted wealth support.
Underneath it all is a simple discipline: when you’re at work, do the work that moves the business. Technology will help, but the decision to diversify, specialize, and show up for clients is yours. If you’re ready to build a firm that lasts, hit play, subscribe for more straight-talking strategy, and tell us: what’s the first change you’ll make this quarter?
I help employed mortgage brokers go self-employed with clarity, confidence and one-to-one mentoring. Find out how Pathways or Coaching works at craigskelton.co.uk
The Broker Foundry – Where Mortgage Brokers Become Business Owners Subscribe on YouTube: https://www.youtube.com/@TheBrokerFoundry
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Hi, welcome to Tweek's The Mortgage Broker broadcast. My guest this week is Jonathan Needham, and I wanted to get Jonathan back onto the podcast because just following on from the couple episodes I've been doing recently about changing the market and the whole mortgage world, I wanted to get his take on it. He's done a bit of a piece recently about the removal of the advice trigger and the paper that the FTA did in July last year. So I just wanted to get his take in terms of the way the industry's going, what effect does the removal of the advice trigger have on the industry, and get his opinion on that. And and also as well, we've been doing the Brook Foundry, uh, which was has has been a podcast and uh YouTube uh channel that we've been doing recently. And what we've decided to do is bring that rather than doing solo rather than doing episodes of the Brook Foundry having a different channel. I just thought, well, Jonathan and I just thought it was better to bring Jonathan as a bit of a more regular guest onto this podcast rather than creating something totally new, just using this platform, getting Jonathan on a bit of a as a guest, a bit more on a regular, on a more regular basis, and then get his thoughts and opinions on various topics within the industry right now. So uh yeah, that's why Jonathan's back on and yeah, talking about the removal of the advice trigger, getting an opinion on, getting his opinion on that, and uh just seeing where the podcast goes. So yeah, let's just welcome Jonathan onto the podcast. Welcome back onto the podcast. Mr. Needham, how are you?
SPEAKER_01:I'm very well, Craig. Thank you for having me back. Um, I really appreciate it.
SPEAKER_00:No, thanks. I appreciate you coming back onto the podcast and having a chat. We'll probably um I've done a bit of theme setting about uh the broker foundry on the intros when you weren't here. So just to explain a little bit about that and why we sort of moved back into this sort of thing. So I'm hoping that um we can get a few uh regular spots on this podcast now, mate. A few more a few more uh guest episodes with your take on the industry, which I think is always important and always entertaining.
SPEAKER_01:Well, absolutely. I try my best. I'd be delighted. Um, and I think as we've discussed previously off air, it it sort of simplifies it for us, um, you know, and and appreciating my current capacity with with what we've got going on at Cornerstone and different things. So yeah, I think it's it's a much better uh sort of platform uh for us to engage. And it's always good to catch up with you, mate, as you know.
SPEAKER_00:Uh it's good to have a chin wag with a uh fellow South Yorkshireman, so that uh does always help. So uh no, I appreciate you coming back. And like I say, we um it's definitely the right platform for this sort of moving forward. So just uh getting straight into it and what the reason why, and appreciate you coming back on and sort of trusting me with no agenda and throwing these sorts of things at you. So for the past couple of weeks, my podcasts have been doing some solo stuff around climate retention and a few other bits as well. So I wanted to, I know you talk did a piece recently about the removal of the advice trigger. And uh I just wanted to sort of get your I've got my own thoughts on it, which we'll chat through because we've not even spoken about it, um, and get your thoughts on it. And let's just have a chat about the whole the removal of the advice trigger and the the the piece of paper that sort of came out about July last year that it came out.
SPEAKER_01:Uh yeah, yeah, July 25. I think um again, I I think we have to be sort of mindful that we're operating in a regulated environment, and far from it, you know, from me to sort of be controversial in any way, shape, or form. Uh however, I think we've we've got a couple of clues uh currently that kind of points us in a little bit of a direction. Um and the the paper that came out last year um probably is is one of those clues. Um and for those of you who haven't read it, and I'd certainly encourage you to to have a look through it, um bit of bedtime reading, but it in a very simplistic kind of way, it it broadens the scope for lenders to engage with clients whose deal is coming up for review, quite simply. That that is it. Um and you know, maybe when it comes to product transfers, we're in a little bit of a uh a perfect storm currently. So, you know, maturity, boom, record number of remortgage uh or maturity transactions coming up. Um and then we've got the lenders who are able to engage with clients directly a little bit more than they perhaps have been previously. Um and you don't need to be a rocket scientist to put two and two together and think, well, maybe they don't need to go and build or rebuild sales forces because there's the potential to create some kind of AI solution. I don't know. Um and then uh in addition to the removal of the advice trigger, uh the other clue that we've that we've had is you know, a fairly big lender within the market has has reduced the prop fees that the paying specifically on product transfers um that that happened, I think, just before Christmas, uh maybe a little bit before then. Um and you kind of think, well, is is this a precursor to um lenders stopping paying prop fees on product transfers, full stop?
SPEAKER_00:What do you think? It's a a really good point. I think there's sort of too like I think there's too much noise when you start looking and start delving into things, there's certain things that make you aware that there could be some changes happening. So you've got some lenders. I'm not gonna start naming, we're not gonna start naming on here, because you can you can find the information if you want to find it out. But some lenders recently, I feel, have gone quite vocal in terms of saying about how they see brokers as instrumental in their business. There will always be space for brokers, they'll always want to work with mortgage brokers. And we're talking about big, we're not talking about sort of like the smaller specialist ones, we're talking about big high street lenders. They've been very vocal around we are we we see the future working with brokers, which is obviously that is that a trigger on the back of another high street lender who we won't name, who is then, like you say, reducing the base points on the retention, the product transfers. But also as well, holding their cards. You ask the right people about what are they doing with regards to AI integration, client retention, and they're playing the cards very close to the chest and disclosing very little in terms of what they're doing, but starts to then thinking, Mama in my mind, well, somebody's being vocal about how integrated we are, somebody's then playing the cards close to the chest and and sort of reducing the the retention rates, then well what's that what kind of message does that sort of send? And I think they are quite clear messages within our industry that things are going to change around the product transfers. And I think like you like you sort of said there, product transfers for me is big, and that's no, that's no, if you if people listen to this podcast before, I've already said on the podcast a few weeks ago, maybe a few months ago, that if you're a broker that purely relies and you're all your business is is product transfers, you need to do something now. You you're at risk. Like, and whether it be proved right or wrong, I'm not really too bothered. But my I think you are at risk. If if your business is purely on volume PTs, you may struggle in the market long term. Now that might be you might not be bothered about that. You might be thinking, well, I'm good, I'm I want to I'm getting out, got an easier life, I'm just retaining my existing clients, just doing PTs, don't charge my fees, don't talk about protection, don't do anything else. If that's your way that you work, well, you've got and that's that you've not got longevity within, I would say, my opinion, you would not have longevity within your business. Whereas, as we've alluded to before, and we talked about before, if you come into this industry as a mortgage broker, new into industry or failing, or it doesn't matter like one year in, two years in five years, you're in this for the long term. You don't become a mortgage broker and think, you know what, I'm just gonna do this for a year, kick a few ties around, and then sort of go on to do something else. You're just not this, you're in this for the long term. So if you are in this for the long term, you're starting to think, actually, what doesn't my business model look like? What does my client demographic look like? All these kind of things. What does my website say about me as a business? What does my social media say about me as a business? Because you've got to start to be aware of these things because, yeah, the the the world of mortgage broken, there's no doubt about me. It's gonna it's well the world is the world in general over the next five to ten years is going to change. Nobody knows what the world is gonna look like. You ask anybody, even the people that are controlling AI, don't even know where this is gonna go. So it's important.
SPEAKER_01:I mean, let's face it, nobody really knows what's going on anyway. Uh not just within our industry, but but uh but um I I think you're right. And you know, it goes back to uh what's the saying? There's three things that we can be certain about. Number one, we're gonna die. Number two, we're gonna pay taxes, number three, things will change. Uh think change is a constant in life. Um and um yeah, with within specifically within the mortgage market, um, I suppose to a certain extent we have um taken advantage of the fact that lenders decided to pay procuration fees on product transfers, and we're now in a situation where we we are perhaps questioning whether there's any real longevity uh within that. I personally don't think there is. Um and I think there's an opportunity, and it's conversations that I know you and I are having all the time with with advisors around future-proof in your brokerage, um, and that is starting to look at uh developing other income streams, um, whether that's um, you know, looking at more specialist areas of lending. Uh, because my view is there will always be a need for an advisor when it comes to more sort of specialist areas. And by specialist areas, uh I think equity release would be one. Um I think we are uh in the midst of an explosion uh around equity release or later life lending in particular. Um, you know, as a society we're living longer, um we are equity rich but cash poor. Um and regardless of what your attitude may well be towards equity release, I think it's a perfect solution for hundreds, if not thousands, of people. Um and and that area is only gonna become more and more uh sort of familiar to people, especially when you consider what's gonna happen with uh inheritance tax and you know the fact that they're introducing pension pots into people's estate values from 2027, the no rate bans being frozen until 2031, I think. So this is yeah, um again, all indicators are suggesting to us that equity release at one area of specialist lending has the potential to grow. Um I think having read an article from the the FCA's chief executive, I think it's certainly something that the regulator wants to bring more mainstream as well. Um but when it comes to specialist lending, you know, I'm not just talking about equity release, um commercial finance, bridging, second charge, all those areas where you you cannot create some kind of AI solution. Yeah. Uh there would always be a need for an advisor. Um I don't think we should fear AI or technology. I think we should welcome it with open arms because um it may well mean that um you know it swings and roundabouts, isn't it? We might lose prock fees being payable on product transfers, but equally as well, it may well drive an efficiency into what we're doing day to day. And that can only be a good thing um for advisors and also the industry. Um but but it it yeah, for me it's about I think it's a healthy thing having these types of conversations because you know the alternative is to bury your head in the sand and just think, oh well, that's never gonna happen. You know, lenders will never stop paying prop fees on product transfers because they'd never do that to us as as advisors, uh, because if they did, you know, um they're gonna run the risk of damaging the relationship. Well, let's face it, the reality is, you know, uh I'm not entirely sure whether your your bigger lenders care that much, you know, honestly.
SPEAKER_00:Uh I think I think that's the realization I thought that these is gone are the days of the the partnerships and the cooperation, like all those kind of things, these banks and billing sites are large corporations that have got a a board and investors, and all so they all they're bothered about is what whether yes, there's certain messages that will come out. However, ultimately they're run by these people that are making decisions that are that are far higher up in terms of, and all they're bothered about is the bottom line and return on investment. That's what they're there, that their target is what the return on investment is. So if they can sort of see that all of a sudden cutting out, they can manage it effectively and efficiently in-house, saving X amount of pounds per year, and that goes straight onto their bottom line without having really any impact on turnover and client service and client journey and client retention. Well, and that that sort of they're gonna start to turn a few heads as soon as somebody makes starts to make more money, then there's gonna turn a few heads from other other.
SPEAKER_01:I mean, it's it's it's a commercial decision, isn't it? And I think you know, if if you and I were in their shoes, we'd we'd probably be looking at looking at it exactly the same. And my my attitude on this uh and the view I have isn't uh you know, let's let's bash the the lenders, the the banks and the building societies. Far from it. I've got some fantastic relationships with uh you know all different shapes and sizes, and uh, you know, they've been incredibly supportive of me and some of the initiatives that that we've been on with over the last few years and more recently, it's not about that, it's about having a grown-up convernu adult conversation with advisors to say you might want to overthink about this, because if it does happen and you are solely reliant or heavily reliant on the income coming from prop fees, then it's probably a good idea to start thinking about future proofing now than getting caught out. So I I I I don't necessarily, you know, uh I'm I'm not being negative in any way, shape, or form towards the lenders. I think it'd be a purely commercial decision. Would it damage the relationships with the intermediary market? Probably in the short term, but everybody just kind of gets over it and gets on with it, don't they?
SPEAKER_00:Um that's the thing, and and that's just part of the change that's going to happen within the industry. If that does happen, as if people just go on with it, you're not gonna stop placing cases with a particular lender because all of a sudden they decided to stop product transfers. Because you can't you can't do that and you shouldn't do that. And you won't do that because it's like you say, it's it's about if you said about the three things. I think the one thing that you have some control over is about how you adapt to change. That that is you know what I'm like AI, just focus on focus on what you can control, don't worry about anything else. Being aware of being aware of other things, but it's very much around focusing what you can control. You can control how you adapt to technology, how you adapt to AI, and the world that was changed within mortgage broker. You can't influence it because the world the lenders, the banks, the building science, all these things, it is gonna be what it's gonna be. You've got to stop, don't put your head in the sand, be open to AI and being aware of actually this is like a bit of a we get I the difference isn't it? And I think when you look back, we had warning signs 2007. We had warning signs 2007 for what were gonna happen in 2008. So we had warning signs 2006, 2007 to what happened in 2008 with the with the crash, but we didn't do anything about it because we just it was just all good times are gonna continue and we're gonna or not, all these things, or you just put your head in the sand and not worry about it. Whereas now, I think we it's that part in this industry. So I think actually we are gonna change. If change is gonna happen. So as a broker, and we're gonna get on to in a second. Of I I'm gonna ask you the question of if you had your own brokeries right now, what would you do? And we'll we'll have a chat around that in terms of giving, like I said, this is not about doom and gloom, this is not about being negative, this is about the realization that the world is gonna change within the next X amount of years as a mortgage broker. So we've got to do something about it and doing something about it now. So the brokers that are switched on are already looking at thinking, well, I need to adapt to the change. And if the change doesn't happen, that I've adapted my business to be prepared for the change if it doesn't happen, then well, great. You've you've you've diversified your business, you're more, you're more likely to grow, you're more likely to be to be here for the longevity. So is that aspect of it that, and whether it's and sometimes you've got to look at as a human being whether you adapt to change or not as well, because people don't like change. That's just human nature. People don't like change. However, it goes back to the the change I can control and the change I can't control. And this is what happens within the industry is not something is beyond your control. So you've got to think about actually, if then AI technology, AI comes into this, the the workspace a lot more from an industry point of view, and what we're potentially seeing with with the lenders, and yes, it will speed up efficient, speed up the process more efficient, hopefully streamline all the bottlenecks that we have in our world and the house buying process and the home buying process, all those kind of things. So there's the massive benefit of it. And it's been the same thing what happened in 2008. Look how many brokers left the industry in 2008 because they weren't prepared. They weren't ready for it. They were used to earn all the money, used to be all the easy life, didn't want to adapt, didn't want to change. The world changed overnight and they left the industry. That's what happened. Well, actually, would like and that will happen again. That will that will happen again to certain people. Now, if you're listening to a podcast and you're aware, whether it's this podcast or any other podcast, and being aware of what's happening and the signs within the industry, you're not one of those people. You are more open to think, actually, I I do need to adapt, I do want to learn, I do want to do want to change. And so that's the whole point of this. This has not been the negative of the the industry that we're in, or against the banks or anything like that. It's just the realization that we are sort of seeing, I'm seeing it, you're seeing it, you're seeing these certain things that actually means that, well, you need to start doing something about it now. Because when that does happen, you don't have a year of no income, 18 months of no income, six months of no income, because you then don't know what to do, you rub it in the headlights, and and then you figure it out post apocalyptic meltdown. You figure it out then. Figure it out now. Have that plan B, have that plan C, have that plan. Because then when it does change. Which it will, you then literally that you're straight into the and so it won't affect your income, your livelihood, your lifestyle, and everything else that comes with it.
SPEAKER_01:Do you do you think um if as a consequence of of change and uh I don't know if it'd be to the scale of being uh apocalyptic, uh, but I I get I get the sentiment. I will get the sentiment. But and if as a consequence of that uh the the industry uh loses uh uh a portion of the advisor population who may well um and and I don't mean to sound in any way disrespectful here, but who sit and are literally just writing proc fees, you know, pressing buttons, charging a fee next, move on. You know, I've I've referred to people in the past as just being order takers, uh focused entirely on uh uh you know sort of transactions rather than building relationships. Um is it a bad thing if the industry loses those types of individuals?
SPEAKER_00:I don't think it is because I think the as a consumer, you want it's more than that, isn't it now? You did you want more, you want more from your mortgage broker, you want more from your financial advisor, you want you want more from these individuals who you are paying for, you've got the trust in them. You don't see it as you want somebody to actually feel like the part of your journey of what you they know what you're trying to achieve, they're helping you achieve that, they've been open and honest with you about the and the realizations of that. And it stems back to it's about education in me. I think that's the thing is like we don't, there's not enough education from the start as as young adults in terms of the whole financial thing. So I think that's sort of the relationship because when you look at it, I think that we're getting a bit sort of I will stay on point with regards to the whole AI thing, because there's gonna be certain things that people will use AI for, and there'll be certain things actually I want I want to know that I'm speaking to and I'm seeing Jonathan need them. Because we like like now, we could put up, I could create this podcast, I could just get AI to create a script, put that script into software, it would then create a podcast, me and you talking, so it would look like you and I were talking, and we wouldn't have to worry. Like we wouldn't have to be sat here talking, wouldn't have to be On our accents. Even our accents, mate, yes, even our accents. We have there is enough content, there is enough content. We'll have used all the words that we need to use at some stage, this out in the public domain, on some video somewhere where it will then scrape it and create that content, and it will literally be there. You go, and we won't have to worry. But actually, is that value are we adding value by that by creating the strips in AI, then transposing that? So my point with it is, which there is a point, that people will want to do there will be certain things people want AI to do and hopefully help all that thing. But we are human beings, and we will want to know that we're talking to a human being, dealing with a human being, speaking to a human being, get the thoughts and opinions and choices and all those other things of a human being. You can already see it now on social media where you've got no idea what is true and what's not true. So, like that, and that's a because you already see you see the BBC verified or whatever it is to show that actually this is not some sort of random made up thing in terms of how much click, how much click do we get now in terms like stuff in YouTube, which is getting fed to like, and which is sort of like just somebody that's created something just for clicks. It's like, no, like people value that interaction with a human being. So where and because we all know we all know that buying and selling your home and dealing with a mortgage is such a massive financial burden, financial expense. It's somebody's dipping into our bank account every single month and taking hundreds or thousands of pounds. We want to know with trusting those people with what's going on. So I think that's sort of like so those people that are transactional. So my point is, those people that are transactional, the brokers that just do click the button, take a fee, next kind of thing, and do not know names of kids, do not know why they move into that street, why, like all those kind of things, I think those people will go because, and the beauty of it is is that so there'll be more mortgages to go around because people will be expecting more, and that's too much hard work for those individuals to understand the ways that certainly we work in terms of personal knowing our clients, knowing where where they live, knowing what the names of the dogs are and the kids and all that kind of thing. People want that more. The beauty of AI is that because the process will be so much smarter, we will have so much time to have those conversations. Whereas at the minute, we feel like we don't because we've got the next application to do, or we've got this lender's chasing us, or we've got to get this and this and all those we so, in fact, as a mortgage broker, you will need to have those personable skills and have those that curiosity to understand more about the person you're dealing with. And you need to be feel rewarded by that, by the conversation happening. And those, like my what's the big the biggest motivation when I was a broker and doing it, the biggest motivation was those emails and those cards and those presents that you used to get saying, Thank you so much, and literally would not have got more, we would not be here without you. And that's do not ever lose sight of that because that's gonna become even more heightened in the world that we're gonna see. And so I didn't think about that. I got a bit carried away without that whole thing, but just I just No, no, no, it it were I I think it were it were very relevant.
SPEAKER_01:Do you think there are things we can learn from uh sort of the wealth environment post RDR and how sort of the uh because I I'm not entirely sure as as mortgage firms and mortgage advisers generally speaking, uh we seem obsessed with finding that next new option, where's my next lead coming from? Um and I don't know whether we sh spend enough time just putting the handbrake on and looking what's behind us at our existing client book, um, and and perhaps working a little bit more effectively, you know, as as you know, wealth advisors do.
SPEAKER_00:Um so good point, and fun of having a conversation with somebody about that exact thing today. Like earlier today, I had a conversation with a broker, and we talk I was talking to him about the change in terms of mindset of that this this is no longer a transactional industry. You've got it it's more and more about relationships, it's more about annual reviews and just and so and I'm understanding what I'm gonna talk about, what am I like, what am I gonna like annual reviews, why would it, why do we need to do that? And that's where that is a very different mindset and way of thinking with the finances advisors' way of thinking, which is again about why you're doing this, why are you moving there, where do you want to do this, why are you putting£50 a month away to your pension, what's your long-term plans, what's your long-term goals, all those kind of things. I think there's gonna be a lot of merging uh merging with regards to the roles. And one, they're not seen as that finance for advisor anymore, and that mortgage broker, and they've got two different distinct things. I think it's a case that as mortgage brokers, we've got to learn to have that more of an advice and educational piece and see this in the long term than a transactional, and you might not use me again in five years' time because the the lender's gonna be touting you and I do nothing to retain you as a an advice as a client.
SPEAKER_01:Well, and they're not gonna remember you, are they? So, I mean, if if uh a paint uh a brief scenario, um and let's assume for one minute that an advisor has, as part of the arranging the mortgage, to have had uh an effective protection conversation, they've identified some shortfalls, they've established a budget, they've made a recommendation, the client hasn't accepted the full recommendation. Uh let's say that they've taken out uh some life and a bit of critical illness cover, um, and they wanted to press pause on the IP, the income protection. Um I don't know what the percentage is, I suppose this is a bit of a rhetorical question, but how many mortgage advisors or mortgage brokers currently would diarise that and go back in three or six months' time? Um and I'm not entirely sure whether it would be a high percentage or not, because and and and you've touched on this, the reality of an advisor's life is it's busy, there's loads of stuff going on, and thinking that going back to uh Mr. and Mrs. Smith to discuss you know whether now's a good time, they've had a couple of months mortgage payments, that is now a good time to look at that income protection. Um there's just no capacity in the diary. However, however, if there are more of us starting to talk uh and and shine a light around the importance of maintaining longer-term relationships, and with the advent of AI that that allows us to have more capacity because we can drive an efficiency into what we're doing day-to-day, then surely that's a good thing because ultimately all we should really be focusing on here is the client outcome. So, what's right for the client? What's right for the client in that brief scenario is that we revisit them in three to six months' time and we have another conversation with them about right, what are your thoughts now? But I don't think we're doing enough of that because we've got, and I am generalizing now, mate, but we've got this obsession about right, I'm on to my next lead, I'm on to the next new thing. Yeah, you know, it's like we're addicted to it. Um, and we're not we're not doing enough with the uh the people that we've already transacted with.
SPEAKER_00:No, we're not, and I think that could be various reasons, Judine. I think I think sometimes for brokers, it is that fear of rejection. So if they've cancelled their IP or they've not taken up the IP, we're using the IP as an example, and there's no plan in the diary to follow it up because that sort of they don't like having that uncomfortable conversation with the client in terms of well, these are the like these are the reasons why it's it we need to talk about it. These are consequences of not having those things in place. We just because that new lead is it's new, innit? It's like something new. We sort of like that new car, it's that sort of you look at like that's it's the new that new thing that's sort of like, oh, this is all great. Once it once they become a client, well, I thought they're just a the client now, they I don't need to worry about anymore. You need to worry more about your clients than you do new ones.
SPEAKER_01:Yeah. And and I think this is my point, it's that that there needs to be a shift in thinking because I would bet you if we if we replayed a similar scenario, but on on this occasion, we're talking about a wealth advisor making a recommendation to a client to be paying X into a pension scheme and the client declines the recommendation and they end up uh going for a lower amount. Why would the wealth advisor revisit that client in six months' time?
SPEAKER_00:Well, they're they're in this for the long that's a different mindset, they're in this for long term because then it's a case of they've taken out the taking on whether they're putting in 10 quid a month, 50 quid a month, 10 rand up for as a lump sum, doesn't really matter. The financial advisor sees this as a long-term relationship because that 20 pound, if they sort of say, well, in order for you to retire at this age with this income, you need to be putting X amount of pounds in per month. And they say, Well, I need to be doing, well, I can't afford that right now, maybe putting 20 in. If at some stage, but at some not if, at some stage, that client's gonna say, Do you know what? Jonathan told me that I need to be putting£50 a month in, and it's been a few years now, and I've only been putting£20 a month in. I'm not the consequences, I'm not gonna be, I'm gonna have to retire at£70, not£67. I don't want to do those extra three years. I'm gonna like, I've had a pay increase, let's forget all about that. I'm now gonna up it to the£50 to what Jonathan told me to, because they will have that realise. And so, but the advisor, by having annual reviews, are they on track to achieve what they want to do, where they want to be, when they want to be there, because that's a different way of thinking, they'll be there's no fear of rejection, shall we say, because well, there's still that long-term goal, and the client said that I want to retire with this amount of money when I'm 60, 50, 40, wherever.
SPEAKER_01:I I I think I think we can learn an awful lot from from the wealth arena in terms of how how they uh build relationships, how they maintain relationships. And and as with as you've just said, it's perhaps a bit of a shift in thinking that this this isn't just you know, it's no longer about transactional relationships, it's about establishing and fully understanding what's important now, but also what's going to be important next year and the year after, and the year after that, and the year after that.
SPEAKER_00:So I think go on, I'll let you finish and I'll ask you a question about your viewpoint and a lot of things that you do, which brokers don't always sort of see depending on who you're talking to, is that they sort of see what's their route out, what's their what's their way out, what does that business look gonna look like? What's the value? What is that gonna give them? What's all those kind of things? Which I know you talk to brokers and business owners a lot in terms of that. What having that mindset of financial advising way of thinking, what impact is that gonna have on the valuation of that business compared to old school, shall we say, way of thinking of transactional?
SPEAKER_01:Well, I I think for a start, if if you're running a brokerage that is purely transactional, there is no value to that. Um especially if it's got you know Jonathan Needham or whoever's name above the door, is because what would somebody be buying? They're not buying anything, are they, really? Um so I think when when you start considering um, you know, let's say that an individual is running a mortgage brokerage, and the reason they're doing that is because they're focused on an exit at some point in the future, then the types of things that we would be discussing with them is uh well for a start, some quick wins. So have you got a GI book? Do you do you recommend GI to your clients? Um because let's face it, you know, the only condition of any any mortgage offer is you've got to have buildings insurance. Um but we we just seem to walk past those opportunities because our general belief is that and yet it's it's gonna build 70% of GI automatically renews. So straight away there's an opportunity there for you to create a value within your business. Um and in addition to that it's looking at uh how you accept your protection commission. Um and and I appreciate you know, we live in a world where we we pretty much eat what we kill. Um but you know, maybe there's an opportunity for us to start migrating to a situation where we take 25% of our protection commission on the drip or on a non-indempty basis, and then we can migrate it to 50 and 75 and 100. And and the relevance of that, well, first of all, you're de-risking your business uh because all all let's face it, all protection commission is paid up front as an interest-free loan to 48 months or however long, but by taking uh your protection commission on a non-indemnity basis, you're de-risking your business, but again, you're adding further value. Uh, you're able to demonstrate a recurring income. Um and then in addition to that, it's well, who's your clients? And are you able to demonstrate to me how you keep in regular contact with these people? Do you keep in regular contact with them? Um so everything, everything I think that we've spoken about uh not just today but previously, um, all sort of points towards well, the the people operating in the wealth environment are doing that already, aren't they? Yeah. Um and I'm not saying that that we copy them, but I I I think that there are there are things we can learn.
SPEAKER_00:Yeah, definitely. Yeah. And I think I I'm not sort of saying, and I agree with that, I think I I appreciate answering that honestly, because I think that's the sort of thing is that if you can demonstrate, there's my GI book, there's my protection non-indemnity book, I keep in turn, I speak to my clients, like there's a 12-month communication plan, whatever that looks like, if you can then demonstrate to somebody, right, this is what it is, this is how I do it, this is the regular communication I have with my client, that valuation of that transactional business, that transactional sort of way of sort of thinking, but is high and increased because it's the clients are used to a different way. Like and that, and we've seen it more, and that you know, a financial, whether we like it or not, a financial advisor's business is worth far more to somebody buying it than a mortgage broker business is. And I think the thing is that as a mortgage broker, you should be working fairly closely to a financial advisor because you're gonna get opportunities. Whether you can spot them or not is another thing, but you should be working with a financial advisor that you know and trust, that's not gonna do the right thing by a client, not gonna steal all your mortgaging protection, not all those things. If you've got that partnership there with somebody, you can sort of have that conversation, sort of see what they do differently to you, then maybe that you can learn from in terms of how they talk to clients, how they maintain relationships and things like that. I'm not talking about doing more work because we're gonna be working smaller.
SPEAKER_01:Absolutely not. I'm not I'm not in the business for doing that, Craig. I can tell you.
SPEAKER_00:No, no, I know that, mate. But I think that's the thing, like people are listening to thinking, oh, this sounds well and good, but I ain't got time about a second to do this or that. You will. You if you adapt and embrace and don't put your head in the sand, you will have more time to build relationships. That's the whole benefit of what of what we're gonna see over the next number of years. So but I think like you say, I think it's a whole shifting mindset that people have got to be changing.
SPEAKER_01:And I think ultimately it's it's driven by being brave and having having courage. Uh because the easy thing, the easy thing is always to do nothing. That's the easy thing. The easy thing is to carry on doing what we've always done. What is it? The the definition of insanity is. Continuing to do what you've always done, but expect a different outcome. You know, definition of insanity. It takes a bravery, it takes a courage, it takes planning. Um, you know, it probably takes sitting down with a blank piece of paper and thinking, right, well, where do I start? What and and as I said earlier, you know, a quick win for me would be just introduce GI to your proposition. Consider taking part of your protection commission on a non-indemnity basis. Not not all uh, you know, to start with, because I appreciate and respect the pressure that that's going to put on cash flow.
SPEAKER_00:But uh, you can split out like we've we've talked in the past about anything under a certain amount per month take up from anything above that certain amount work our figures were for you. Like you say, you don't have an impact on cash flow because, as we know, cash flow is very important.
SPEAKER_01:Well, absolutely, and and again, you know, I I don't I don't want to sound like I'm now bashing the providers, moved on from the lenders, and now we'll have a go at all of them. But I don't know whether there's more that the providers could do to perhaps encourage uh advisers to be taking the commission on a non-indemnity basis, or as we all refer to it as on the drip. Um I I don't know whether it suits some providers that everybody takes it up front. Who knows? Maybe that's another subject altogether.
SPEAKER_00:It could be a whole topic topic altogether, that mate, to be fair. So but I think the whole point of this, and it's been quite different, this podcast, because like normally it's me interviewing the other person, speaking sort of like the 80-20. As well as I've been sort of interviewed on my own podcast, which is not bad. It's been good to get sort of both our viewpoints in terms of where we're where we're thinking this world is uh we're going. But so just to summarise, clarify, I'm a broker right now, and I can sort of see things are changing within technology, things are happening. You've alluded a little bit in terms of a few things that could change. If you were a broker, you setting up your own firm today, you know the industry, you know that you like you are where you're at. What advice would you be giving somebody who was setting up their own brokerage?
SPEAKER_01:Um good question. Uh, thanks for putting me on the spot. Uh, I think the first one would be uh don't have all your eggs in one basket, which which probably summarizes what we've been discussing about looking at diversifying income streams. Um, and that's not necessarily about you know uh being a jack of all trades and a master of none, but just really think about what what areas uh you you're gonna focus on. Um have you got some areas of specialism, which I'm a firm believer will always maintain a relevance and it'll future proof. Um I think um and your position on things like social media, whether you like it or not, that's that's your shop window these days. Um so you've you've don't don't cut corners on that. Spend as much as it needs to cost, uh as much as it needs really to present uh yourself to the world in the right way. Um and something else we've touched on, and that is always stay within your circle of influence. So always stay focused on the things you can do something about um rather than worrying about things that you may well have an opinion of, but you know, you you've just no influence over. Um the honey pot is absolutely key. So, you know, buy honeypot, that's your lead source, having people to speak to. If you've got people to speak to, you've got a business. Um and and then the the final one would be something that I've been speaking about a lot recently, and that's product density, um, which basically means don't just flog them a mortgage. Um, you know, think about the number of uh connections that you've got with your client, uh going through a full holistic process, uh, making sure you're having the protection conversation, identifying shortfalls, establishing a budget, making recommendations. That ultimately I do believe means that we are fulfilling our responsibility under consumer duty as well. Um we're protecting the client and also you know there's there's gonna be a financial reward off the back of it. Um so um, but yeah, I think focus on living in your circle of influence would be uh would be my biggest sort of tip, if you like.
SPEAKER_00:I know I do appreciate I put you on the spot there, but I think it was relevant. You've talked about the GI, you talked about it, you talked about a really sort of really good point there in terms of future-proofing your brokerage, which is what this is all about. And I think that's like it is, and we I understand if you're an employee broker, there's only so much you can do within that. If you're a self-employed broker working within a business as an RI, there's a certain thing you can do within that as well. If you are self-employed running your own business or whatever, and it's your name over the door, then there's a lot more you can sort of do about that as well. And I think because people are this people that are transitioning, people that are moving from RIs to BARs, there are people that are moving from very various different things, employed to self-employed, all those kind of things. I think just hearing it from you and your position and your experience and what you what you're guiding people going through, Jonathan, it's quite sort of it's good giving people that clarity to think actually, what would Jonathan do in my situation and what would Jonathan be doing? And I think that sort of from what you said there, those top tips, shall we say, from um what were the Viz ones? I'm trying to I'm trying to think what the Viz thing came to my head then from the uh 80s comic or 90s comic or whether it's still around. I think I think Jonathan's top tips there, whether whether we patterson that or not, I don't know. But I think it's just relevant to then thinking, actually, this is where I need to start. And having those honest conversations with yourself about circle of influence, about the website, about social media, about your shop window, are all relevant because you've got to have though been awareness of that and thinking actually, if it step steps you out of the comfort zone, it if it makes it uneasy for you, if it does seem hard to swallow, wrapped around all this is what you said. It's about being brave. And that's the thing with all this, you've got to be brave.
SPEAKER_01:I'll I'll give you a mic drop moment to to close it off. To end on yeah, so um this is this is kind of relevant to to operating within a self-employed environment. Uh, but I remember when I sort of first transitioned from employed to self-employed, um somebody once said to me, um, when you go to work, make sure you work. And I know that sounds fairly obvious, and you're looking at me a little bit, you know. We within a self-employed environment, if we're at work, let's make sure that we're doing something productive that is making a difference to our business. Otherwise, go and do something else. Don't pretend. No. Uh and I think that sometimes a lot of that goes on.
SPEAKER_00:And and and I wasn't when you sort of said that, because we've not spoken about it before, you've never said that to me to be to me before. I was just processing it because actually that is just so real, like it is so real. It's literally, if you you're employed, it's a case of starting work at a certain time and you're working till the end time of the day, kind of whatever that looks like. And if you can scroll and if you can sort a few other things out while you're getting away with working, whereas when you're self-employed, work. And when you don't need to work, don't work. Don't busy yourself, don't do it. Don't feel guilty, don't do it. Mate, perfect ending. Thank you so much for coming back onto the podcast. We'll get you on again, no doubt, very, very soon. Thanks for your opinions. That must be honest there. Yep, and now we'll uh I'll see you soon.
SPEAKER_01:Yeah, cheers, mate.
SPEAKER_00:Thanks. Thanks, Jonathan. Thanks for being an amazing guest as always. Thanks for agreeing to come back on. Thanks for agreeing to trust me with no agenda. And really being giving your honest feedback in terms of the the mortgage market, the world of the mortgage broker, mortgage advising, and what the future looks like. And really, the the hints and tips that you've shared, really useful if you're thinking about be going think to going self-employed as a broker or setting up your own firm. I think it's relevant to people within the industry in terms of the changes that they're looking to make. Thanks as always for agreeing to be a guest coming back on, and I'm looking forward to recording more episodes. So thanks as always for listening. Thanks, subscribing. Any thoughts, comments on the podcast, please leave them in wherever you watch or listen to this podcast. And as always, please do not forget to run your own race.