Mortgage Next has recently been paid a, shall we say, somewhat unusual compliment. A directly authorised (DA) mortgage intermediary recently published a letter in which he said the only mortgage club he deals with is Mortgage Next, ‘because its representative has nice legs’.
Fair enough. Not the ideal reason for a broker to choose us, but I’m delighted that we’re the only mortgage club on his radar.
Before you get the impression that it is natural home for weirdos and dirty old men, let me point out that the broker in question was actually making a light-hearted comment to give emphasis to a serious point.
The point in question is that, in his view, very few mortgage clubs justify their keep and don’t deserve their place in the food chain between brokers and lenders. He believes that it isn’t good enough for clubs to simply negotiate a few exclusives and provide a ‘sticker-and-submit’ style application service and then cream off a fat slice from proc fees. Mortgage club propositions have to go much further if they hope to win the loyalty of mortgage brokers.
Fair points and difficult to argue with his logic. I would like to think, however, that ‘added value’ means far more than simply providing representatives with nice legs (I don’t remember sexy legs being a key criteria in our recruitment process). At Mortgage Next, we have spent a lot of time, effort and money during the past six months strengthening our ‘club’ proposition.
Qualifying factors
We believe that providing access to market leading products (including exclusives), highly competitive fees and a professional and reliable service are factors which simply qualify mortgage clubs to compete. They are not, by themselves, reasons for brokers to choose one club over another.
We have therefore adopted a strategy which is based on providing a wide range of additional services for DA brokers. However, that doesn’t mean we think ‘sticker and submit’ style mortgage clubs have no place in the market.
We believe that what’s important is not whether a club provides a basic or all encompassing service, but whether it is open, honest and transparent with the claims it makes about its service. Sticker-and-submit services have their role, but it is not acceptable for clubs to dress up such a service and price it as if it’s providing more than it actually is. A yawning gap between expectation and delivery is the very thing that gives clubs, or any organisation for that matter, a poor reputation.
Networks
The same principle applies not just to clubs but to networks. I was amazed therefore that Mortgage Next was recently criticised for publishing its network charges and providing a means for appointed representatives (ARs) to compare them against those of other networks. The complaint (yes, you’ve guessed, from another network) was that network fees are only part of the cost equation and the level of procuration fees being paid is just as important.
Yes, of course it is but I haven’t yet worked out a way of letting prospective ARs know if we would have paid out more in proc fees than their existing network. It obviously depends on the volume and type of business generated and the proc fees agreed between lenders and individual networks. If I work out a way to do this, I’ll let you know.
In the meantime, providing an online calculator which compares network costs against those of any other company, has to be a step in the right direction. We may not be able to provide the perfect answer, but you’re not telling me that network costs are not a key part of any AR’s decision making process?
Again, it all boils down to a question of being open, honest and transparent. This is not a question of ethics or taking the high moral ground, it’s a case of making sound business sense. Winning new ARs or DA intermediaries as the result of making false promises is an expensive mistake to make. Recruiting and bringing on board a new member is time consuming and expensive, and to lose them a few months later when they realise they have been sold a pup, gives no opportunity to recover the front-end costs that have been incurred.
So, in the spirit of honesty and openness, let me tell you a terrible truth about Mortgage Next.
Not all our representatives have nice legs.
