For the past seven or eight months in this magazine I have been advocating the importance and the opportunities that secured loans provide to the broker market. Included in the list of topics I have previously mentioned was the fact that lenders would come into the market as they knew there were opportunities in a fast-expanding sector. Another topic was the newly formed Association of Finance Brokers (AFB).
On 18 September, Kensington Mortgages launched its secured loan proposition into the market. In my opinion, when a company of the stature of Kensington moves into a market, you have to sit up and take notice. After all, it was the pioneer of the non-conforming mortgage way back in the mid-1990s, when many industry commentators thought there was no way the market would ever take off.
Room for something different
Unlike the specialist lending mortgage market, where many are debating that the market is already saturated, with lenders offering more or less the same thing but dressed up differently, the secured loan market still has room for lenders who are going to bring something different and new. That is exactly what Kensington has done by having some new unique selling points (USP) which may make some of the other lenders sit up and take notice.
One of these USPs is allowing the customer the option of taking monthly payment protection (PPI) as opposed to the old single premium protection, which has been receiving more bad publicity than Sam Allardyce for the alleged ‘bungs’ in football. In addition to this, it has extended the early redemption charge to include unregulated loans over £25,000 – something it did not need to do until early 2008. This shows it has researched the market well and come up with this, solely with the client in mind, and that it is looking at a long-term plan to be major market players.
Hurdles to overcome
The AFB has featured regularly in my previous articles. I headed off to the House of Commons for its official launch, where The Rt. Hon. John Gummer MP and AFB Chairman addressed the members and representatives of lenders who cared to attend and listen to what was a very interesting, knowledgeable, relevant and well delivered speech. I now hope the board of directors of the AFB continue to build on this start and make it an organisation that does act on behalf of the members, as there are a lot of hurdles to overcome in our industry in the future.
At this stage I am probably going to upset a few people, as I am sitting on the fence ,whether it will or not. My reason for this is personal, because as a person who is passionate about my industry, I made it known that I was willing to stand for a place on the board of the AFB as there were still spaces available with only the right amount of people applying.
I was told on the night of the launch there was a meeting of the board the following day to decide on the new members. As I waited with baited breath to hear if I was accepted or not, I called the AFB to be told that it had not decided and the board was waiting to try and attract some other potential board members who maybe had specialist ‘compliance’ or ‘lender’ experience.
Again, this is personal, but I was under the impression that this was the AFB and not a compliance or lender organisation, and also was it not the intention of coming under the umbrella of its sister organisations, the Association of Independent Financial Advisers (AIFA) and the Association of Mortgage Intermediaries (AMI) to draw on their experience of compliance? Maybe I am being paranoid and feel that because of the content of previous articles, where I criticised the AFB when it was originally set up, and it does not want someone to ruffle feathers. Or maybe I am completely wrong, and that they have a reason for not utilising someone with 23 years experience who would give 100 per cent effort to the cause of the AFB and the genuine interests of the secured loan industry. As I said, I will sit on the fence just now, but here’s hoping I am wrong.
