GHL Group has recently celebrated its anniversary. An amalgam of Genesis and Guaranteed Homeloans the organisation that merged on November 16 2005 represented a new and improved player in the mortgage network market. Announcing the merger at the London Mortgage Expo in 2005, John Smith, and Nigel Gardner have had an exciting year putting their new business model in place, promoting GHL Group strategy and its benefits.
Commenting on the decision to merge, Nigel Gardner managing director at GHL Group admitted the two companies shared a synergy that could be combined. He explained: “There was a definite synergy between the two companies and it made sense to combine the two. While one company was good on compliance and human resources, the other placed a bigger focus on other aspects so it made sense to integrate. As a result we practically doubled the number of appointed representatives overnight, and we have just passed the year anniversary of the merger.”
John Smith, sales and marketing director, admitted that the first year of trading as GHL Group had proved challenging, but exciting and fruitful. He said: “Because Guaranteed and Genesis merged to make the GHL Group we have significantly strengthened our offering. We have changed a lot of the organisation, making it more accountable with a much greater customer focus. There has been a significant restructuring within the first year, and despite all the changes, business is up on this time last year.”
He added: “This year has been a period of consolidation, and to some extent this will continue, but the results we got from the Financial Service Authority’s (FSAs) ARROW visit and the business model we have in place means that we have set the foundations for future sales and growth.”
As part of the merger system controls, procedures, appraisals and other in-house elements had to be ironed out over the course of the year. However GHL has its eyes set firmly on growth throughout the next 12 months, albeit in a restrained manner. Gardner said: “We want to grow the company but we won’t take people on just for numbers sake. The quality of advisers is far more important to us than the number we have.”
Smith confirmed GHL Group was never likely to be top of the list with regards to the number of advisers, but admitted its business model allowed
it to be a lot more selective with
its recruitment strategy.
Technology
Focusing on the future of the mortgage market, the two directors both admitted that continued enhancements by intermediaries, lenders and other organisations would be essential to the future growth of the market. With the recent launch of automated valuation models (AVMs) by edeus, Kensington and the GMAC-RFC point of sale offer (POSO), Gardner suggested that technology, coupled with service would be central to the future market.
However Smith admitted that intermediaries wanted an element of the personal approach. “Communication is key. People like to feel wanted, with the personal touch. We hold monthly AR dinners, quarterly forums for our key accounts, which lender representatives and members of the board attend and have just held our first gala event, which will get bigger and better each year. It is essential that advisers feel that they have a say in the organisation and what its plans are.”
Gardner added: “A lot of people still have an element of ‘I don’t like technology’, but it is impossible to ignore. Some people still prefer to use a pen and paper, but you can do so much by utilising the internet and email. Time management is a lot easier, and I think that less and less will accept paper applications as the year’s progress. While some may restrict this within the next 12 months, for other lenders it may take a decade before they stop accepting paper applications.”
Regulation
“The FSA has had a good affect on the market but it’s not a perfect animal,” stated the GHL managing director. “The FSA was needed to raise standards in the market, and from that point of view it has had a beneficial impact. It will take time to get everything right, but people should see the introduction of regulation into the sector as an opportunity. It is not going away, so there is no fighting it.”
He admitted the two years since regulation had proved ‘interesting’, with the launch of principles-based regulation set to cause further waves within the intermediary community.
“We have a good working relationship with the FSA, and it is good that the FSA has started taking action against firms that are flouting the rules. The FSA should be applauded for cracking down on non-compliant organisations.
“The ARROW and thematic visits that the FSA has conducted have proved really useful to the business and we have been able to go over any issues with them,” he added.
Looking to the future of the market, and the FSAs possible targets for greater involvement, Smith highlighted the self-cert and non-conforming markets as possible areas of action for the regulator. “There has been a lot of talk the last few weeks about PPI, but I think the FSA review of the self-cert market will highlight its future movements and how much time it has to devote to this. Mortgages into retirement and interest only are other areas that the FSA must devote attention to.”
With much focus on the area of financial promotions, the GHL directors admitted that for the one and two man bands, complying with all of the FSA regulations would be a tough, but not unachievable target. “For sole brokers and small firms it must be tough staying on top of the ever changing regulatory changes, and any time spent looking after this side means that they are taken away from their job of selling.”
Future of GHL
GHL Group has grown considerably since the launch of the company. Cementing the one year anniversary, a new corporate identity has been launched to encapsulate the GHL Groups strategy going forward into 2007 and beyond.
Enhancements to its website have also been made to bring the group firmly into the 21st century and cement its reputation as a network keen to grow and expand in the bustling market. “We have updated our website to make it more modern, but the focus has been centred around functionality. It is all well and good to have a funky website, but what use is it if it isn’t functional?” said John Smith. “The website got an eight out of ten rating for its functionality and it is so easy to use.”
So what is next for GHL? Gardner admitted that GHL were keen on any acquisition opportunities that would arise, but reiterated that it was quality, rather than quantity that GHL was after.
With plans to further bolster the GHL Group team to over 80, over the two sites-Maidstone and the Peterborough head office,
to accommodate the
expected increased levels of business the GHL future looks bright.
