At the Finance Professional Show this week there was a lot of talk about regulation and the threat to the commercial finance broker market as it stands.
A seminar in the afternoon session attempted to identify the positive aspects of regulation for the broker industry.
Everyone understands that the level of detail required for regulation will be difficult for some brokers who are not used to it – that’s a given. Because of this, we should expect attrition in the market. However, the overriding message was that fear shouldn’t be the only emotion for brokers in the coming months.
The NACFB announced its intention to become a principal so its members are allowed to become appointed representatives. A strong and helpful move from the association and the sort of proactivity that is becoming its hallmark.
One panellist compared the current situation to the period when changes affected the IFA market, while another said people used to be wary of insurance salesman, but now they are credible. The message being that newly regulated markets are always better for those left behind.
Going it alone?
Being regulated as an individual might be difficult, but it is not impossible, particularly when operating through a network. There are advantages to being part of a larger firm with the onus on brokers to prove competency, but it's certainly not impossible to do it as an individual, especially for those thinking of entering the market as they won’t have known a different situation.
Opportunities
Amid the scepticism, there were opportunities in the market identified.
Looking towards the future, investing in young people is a real chance for brokers to grow their business sustainably.
It also provides a barrier to entry for other brokers, so any brokers looking to exit the market could see selling their business as an opportunity. Value will inherently be higher in this environment.
When countering other external threats, brokers should play up their strengths and capitalise on other external influences, particularly as banks go increasingly online and withdraw physical branches and services.
Customers really value knowledge in the market, so brokers need to play that up. We all know many customers want something quick and easy – but going online and doing it alone doesn’t always ensure that happens. Choosing the right product in the first place and providing all the right information ensures a quick and easy process and that is bread and butter to brokers.
Brokers can be more like the bank managers of the past in light of business development teams being scaled back. Where else can business owners go for impartial advice about business finance from people whose sole responsibility is finding the right business funding solution.
So the call to action was: get qualified before you have to be qualified. Take the opportunity to stand out and maximise the marketing value in that.
A seminar in the afternoon session attempted to identify the positive aspects of regulation for the broker industry.
Everyone understands that the level of detail required for regulation will be difficult for some brokers who are not used to it – that’s a given. Because of this, we should expect attrition in the market. However, the overriding message was that fear shouldn’t be the only emotion for brokers in the coming months.
The NACFB announced its intention to become a principal so its members are allowed to become appointed representatives. A strong and helpful move from the association and the sort of proactivity that is becoming its hallmark.
One panellist compared the current situation to the period when changes affected the IFA market, while another said people used to be wary of insurance salesman, but now they are credible. The message being that newly regulated markets are always better for those left behind.
Going it alone?
Being regulated as an individual might be difficult, but it is not impossible, particularly when operating through a network. There are advantages to being part of a larger firm with the onus on brokers to prove competency, but it's certainly not impossible to do it as an individual, especially for those thinking of entering the market as they won’t have known a different situation.
Opportunities
Amid the scepticism, there were opportunities in the market identified.
Looking towards the future, investing in young people is a real chance for brokers to grow their business sustainably.
It also provides a barrier to entry for other brokers, so any brokers looking to exit the market could see selling their business as an opportunity. Value will inherently be higher in this environment.
When countering other external threats, brokers should play up their strengths and capitalise on other external influences, particularly as banks go increasingly online and withdraw physical branches and services.
Customers really value knowledge in the market, so brokers need to play that up. We all know many customers want something quick and easy – but going online and doing it alone doesn’t always ensure that happens. Choosing the right product in the first place and providing all the right information ensures a quick and easy process and that is bread and butter to brokers.
Brokers can be more like the bank managers of the past in light of business development teams being scaled back. Where else can business owners go for impartial advice about business finance from people whose sole responsibility is finding the right business funding solution.
So the call to action was: get qualified before you have to be qualified. Take the opportunity to stand out and maximise the marketing value in that.
