It may seem like they have crept up and sprung out of nowhere, but secured loan brokerages have been around for decades now.
Initially starting life in a low-key way, typically with small ads peeking out of the classified sections of magazines and the red-top press, brokerages have gradually gone from strength to strength, and are now a major commercial force in their own right.
As business grew and grew, the industry could look at itself and consider it had done ‘very nicely thank you’, operating in a handy little niche providing a valuable service to a previously neglected section of the consumer marketplace.
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Furthermore, over the ensuing years rising equity and debt levels meant that ambitious loan businesses expanded rapidly. Despite a few casualties, a vibrant and growing industry was formed and a few household names were created. With a new UK consumer culture of growing debt mirroring its US counterpart things looked very good for the industry.
Success creates success – and of course interest and attention from the likes of the media, rival industries and from regulators. All in all, it meant that secured loan companies no longer had the luxury of seeing themselves as islands cut off from and impervious to the attentions of the outside world.
It was obvious that interaction on the level of, say, a twice-yearly social event to catch up on the gossip was not going to be enough. The secured loan industry was now serious business and there was a clear need for a trade body to fill the gap.
As anyone who has started a trade body before in the past will almost certainly agree, it is no simple matter. The easy bit was deciding on the name – the Association of Finance Brokers (AFB).
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More time-consuming were the dozens of meetings to agree tedious but nonetheless essential details like procedures, finances and constitutions before any of the exciting policy stuff could be started.
But despite the initial teething issues, I am pleased to say that the AFB got off to a good start with a strong representative board, the resources of AMI and a good man, Robert Sinclair, at the helm.
Of course it’s impossible to change the world in the six months the AFB has been running, although a lot of good progress has been made.
But it is ‘so far, so good’. The 120 member firms have now all received guidance factsheets on topics ranging from TCF, to handling FSA visits and selling PPI. Any secured loan brokerage currently operating and not interested in these topics should probably have its head examined.
The AFB now has a growing profile within the finance industry and has to date attracted 11 of the key lenders as associate members. This has led to some valuable communication between brokers and lenders on some of the key regulatory issues. More specifically, debate has occurred recently as to the roles of AFB and FISA with great hopes for a strong working relationship as FISA goes through its own period of change.
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On the regulatory front the AFB now has a voice with the Financial Services Authority (FSA), Financial Ombudsman Service (FOS), Office of Fair Trading (OFT) and Department of Trade & Industry (DTI), where meetings have been held and presentations made on both sides. These have received a very positive response. Communications with these bodies are obviously a continuous effort to ensure brokers stay ‘connected’ in an ever changing finance world.
And for those with strong livers and plenty of stamina, the wonderfully entertaining ‘Autumn Weekend’ is a key feature of the calendar – I can thoroughly recommend it.
I recognise that there may be sceptics out there, wondering why we really need an organisation like the AFB.
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Well, whilst there are still doubtless dinosaurs who long for the old days, the vast majority of secured loan brokers are buying into a new dawn for our industry. There is undoubtedly more change ahead to help a beleaguered consumer who simply wants to borrow some money and should be able to do so as simply and transparently as possible.
Consumers are currently in a state of ‘information overload’ caused by the plethora of inconsistent information on the unsecured, secured and mortgages loans available. All the time this is the case we should not be surprised by change. However, whilst change is unsettling, what we all know is that with change comes opportunity, and those best placed to meet the change will thrive. With the AFB in place and a growing momentum behind its activities, member brokers can be confident that they are well informed and represented to meet that change.
So, what is life like for a secured loan brokerage under the AFB. Well, I can speak for Click– and of course things have not changed dramatically day-to-day in such a short space of time.
But what I can say has changed as a result of the AFB is that we are ready to face an exciting future full of opportunity.
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