ARE REGULATED BRIDGING FIRMS HITTING THE CONSUMER DUTY MARK?
+ Giant steps towards a better industry p20
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Editor-in-chief
beth@medianett.co.uk
Special thanks
Jonathan Wood, Chetwood Financial Vic Jannels, BDLA
Adam Tyler, FIBA
Gordon Reid, LIBF
Gillian Tait, Competent Adviser
Mandeep Basra, West One
Catherine Nessworthy, Yorkshire Building Society
Printing
The Magazine Printing Company
Design and image editing
Jana Rade, impact studios
Bridging & Commercial Magazine is published by Medianett Publishing Ltd
Managing director
Beth Fisher
beth@medianett.co.uk 0203 818 0160 Follow us: Twitter @BandCNews | Instagram @medianettpublishing
Summer tends to be the quiet period for the specialist finance sector, when people rest (and maybe get some sunshine), regroup and plan for the second half of the year. However, this year’s been a different story, as we’ve seen the Bank of England cut the base rate for the first time since March 2020, and a new Labour government come into force after the July general election—many of which are hoping will reboot the property market, and drive activity.
July also marked the first anniversary of the new Consumer Duty rules, a big change that has shaken a wide range of financial sectors, including the regulated bridging finance market. Having reached this one-year milestone, and with the first Consumer Duty compliance reports submitted by firms at the end of July, it is now time to take stock and reflect on this year-long exercise, in preparation for the next stage. For this issue’s cover story, we set out to get the lay of the land on Consumer Duty, straight from the experts who have worked hard to implement these rules [p48].
As this issue is focused on industry standards, we couldn’t not speak to a woman who is dedicating her career to driving excellence through education—HTB’s deputy managing director for development finance, Uliana Kuzmis. We had the pleasure of speaking to Uliana about her successful masterclasses and what else is missing to take the development finance sector as a whole to the next level [p20]. If this is not enough to inspire you, Enra Specialist Finance’s CEO Danny Waters shares his insights and experience as a mentor with us all, together with two of his top mentees: West One’s head of bridging Tom Cantor, and head of development finance Guy Murray [p85]. Plus, after years of speaking and writing about the CPSP, it was time for me to take the bull by its horns and experience the course myself—and share this with you all, of course [p39].
We also take an in-depth look at how social media is reshaping our industry and the ‘professional’ image in our sector [p8], and whether LinkedIn is the panacea of keeping people accountable for their actions and misbehaviours, or whether it is doing more harm than good [p77].
To top it all off, we bring you some juicy exclusive interviews with some of the most respected industry experts that are looking to challenge and shake up the industry—including Chetwood Financial’s newest appointments, industry stalwarts Alan Cleary and Roger Morris [p64], Finanze’s Alastair Hoyne and Andy Keehnan [p29], and StreamBank’s new CEO Mike Kirsopp [p32].
Andreea Dulgheru
“This industry needs to improve. It’s difficult, complex and lacks transparency, and there are so many things we can do to make it better” p20
One Day
Spotlight
In
Limelight
the latest regulated finance options
SPRING FINANCE
Regulated development finance
• loans from £100,000-£2m
• covers 100% of build costs
• no exit charges
• 65% maximum LTGDV for light development
• 60% maximum LTGDV for ground-up development
• rolled-up interest
• product fee of 2% of facility amount
TOGETHER
Consumer BTL finance
• first-charge options from 7.75% for two-year fixes and 7.65% for five-year fixes
• second-charge loans from 8.5% for two-year fixes and 8.4% for five-year fixes
• variable rate options available from 9.3% for first-charge and 9.85% for second-charge
• 75% maximum LTV
• £50,000 minimum loan size
• 2.5% product fee
SWANSEA BUILDING SOCIETY
Regulated bridging finance
• loans from £50,000-£1.5m
• 60% maximum LTV
• 2% product fee
• no ERCs
• £250 application fee
UNITED TRUST BANK
Regulated bridging finance
• loans from £100,000-£15m
• available in England, Wales and Scotland
• 75% maximum LTV
• rolled-up interest only
• 2% completion fee on drawdown
• no exit fees or redemption penalties
• free AVMs on applications of up to 65% LTV
• rates from 0.72% pm for first-charge and from 0.82% pm for second-charge
GLENHAWK
Regulated bridging finance
• loans between £100,000-£2m (above £2m on exception)
• terms between 3-24 months
• 75% maximum LTV
• AVMs considered up to 60% LTV
• adverse credit considered
• rolled-up interest
STREAMBANK
Regulated bridging finance
• loans between £100,000-£3m
• 75% maximum LTV
• no exit fees
• dual legal representation available
• AVMs up to 65% LTV (£1m property value)
THE CUT
Living the influencer life
Love it or hate it, social media has become an intrinsic part of our lives, including our work environment. Nowadays, lenders and brokers use different platforms to promote their brand, network, and drive knowledge through educational posts. However, with such extensive use of social media, is the line between personal and business getting blurry? Several social media gurus from the specialist finance market share their insight into how social media is changing the market and the definition of professionalism
Roger Morris, group distribution director at Chetwood Financial
Social media has dramatically accelerated the way in which we can deliver educational messages to mortgage advisers’ mobile phones and laptops, which I believe is helping to drive up standards massively. The key to its success is the speed at which you can disseminate information and the variety of different ways in which you can communicate with people. It’s so much easier to get a message out there nowadays, enabling you to connect with people instantly and in a very effective manner, whether that’s by a text-based message, an image or with a video.
It’s also helping to foster a real sense of community among the mortgage industry, enabling people to strengthen existing relationships and form new friendships. People can keep up to date with the latest developments, have a chat with one another, enjoy a bit of friendly banter and just generally feel as though they’re a part of something special.
Kim McGinley, founder and managing director of VIBE Specialist Finance
I believe that social media plays a role in enhancing standards within the specialist finance market. By providing a platform for open communication and real-time updates, it promotes increased openness and clarity, which is essential in an otherwise unregulated market. Social media enables businesses to share information, building trust with clients. Additionally, social media can serve as an invaluable educational tool—industry experts and knowledgeable brokers can use these platforms to provide insights, best practices, and regulatory updates, thereby promoting a higher level of education within the market. This aspect helps elevate the overall standards as more individuals and businesses become better informed about the intricacies of specialist finance.
However, there is certainly another side of social media with the industry we are in being unregulated—the spread of misinformed and incorrect information can be damaging as clients can take this information as gospel when making significant financial decisions.
Anastasia Ttofis, co-founder and CEO of iLA
Social media is a game-changer for the specialist finance market, primarily by increasing transparency and driving education. Platforms like LinkedIn, X, and even Instagram provide real-time access to industry news, trends, and insights. Financial professionals are sharing their knowledge, from the latest regulatory changes to innovative financial strategies, making complex information accessible to a broader audience. This transparency builds trust and credibility within the industry. Additionally, social media fosters a culture of continuous learning. Professionals can easily access webinars, tutorials, and discussions, helping them stay updated and informed. The collaborative nature of social media also encourages the sharing of best practices (and also highlighting the worst at times), leading to higher standards across the board. In short, social media acts as a dynamic platform for education and transparency, pushing the specialist finance market towards greater accountability and excellence.
HOW IS SOCIAL MEDIA HELPING TO INCREASE STANDARDS IN THE SPECIALIST FINANCE MARKET?
Shaz Ahmed, founder of Elan Property Finance
Social media, when used well, can be a great tool to raise standards. Platforms like LinkedIn and Instagram are increasing transparency through open communication, and are a way of holding all of us accountable because of how 'available' we are.
Sharing wins and best practices without gatekeeping, to me, is another way to raise standards and awareness. This could be through case studies, videos, carousels and posting about recent deals and 'wins'. Also pulling back the curtain, just a little bit, into what goes on behind the scenes is something I find works really well, especially in terms of transparency.
Educational content shared by specialists empowers borrowers with knowledge, while discussions and online communities on X and Facebook create a space for knowledge exchange. Social media also empowers specialists to be more than just transaction facilitators. We can leverage our platforms to advocate for ethical practices and best practices. This newfound influence allows us to shape industry standards and promote positive change within the specialist finance landscape.
IS SOCIAL MEDIA CHANGING THE ‘PROFESSIONAL’ IMAGE OF PEOPLE WORKING IN THE SPECIALIST FINANCE SECTOR?
Roger Morris, group distribution director at Chetwood Financial
I think the biggest misconception is that specialist finance experts are just using it to boost their own profiles so they can get more likes or followers. I like to think that people can see through that, and can recognise when someone’s being genuine and passionate about what they’re trying to communicate. It’s not about self-promotion or boosting your own self-worth, it’s about showcasing a product or the place where they work and how it can help others. The reality is that engagement is higher if the person communicating something can humanise, personalise and demonstrate the value of the product or service they’re promoting.
Ultimately, the way someone who’s using social media is perceived is all down to the person who’s reading or watching a social media post. Saying that, I’m very much in the camp that if you’ve got the best thoughts and intentions for the end consumer in mind, then you can’t go far wrong. If your message is communicated well and is accurate, honest, and balanced, then I believe it will be received positively.
Kim McGinley, founder and managing director of VIBE Specialist Finance
The professional image of individuals working in the specialist finance sector is undoubtedly being reshaped by social media. It highlights a more human side of professionals, as people often share aspects of their lives outside of their day-to-day job roles. This increased transparency can make social media an uncomfortable space for some, as it blurs the lines between personal and professional lives, but this is something I have always done.
The perception of what is considered ‘professional’ varies greatly among individuals. While I believe that showing our human side is valuable, others may disagree and argue that platforms like LinkedIn should remain strictly business oriented. This discrepancy in views highlights the subjective nature of social media's impact on professional image. Ultimately, social media can either positively or negatively influence one's professional image, depending on how it is perceived and utilised. For some, it humanises professionals and encourages genuine connections, while for others, it may detract from the traditional notion of professionalism. This creates a love-hate relationship with social media for many in the sector. I personally love seeing people showing their human side and feel it has benefitted my business greatly.
Anastasia Ttofis, co-founder and CEO of iLA
One of the misconceptions about using social media for business is that this is not a serious platform for finance professionals. In truth, many industry leaders use it effectively to establish their credibility and influence.
Social media is definitely reshaping the professional image of those in the specialist finance sector, and it's a mixed bag. On the positive side, it breaks down barriers, showing the human side of finance experts, and by sharing personal insights, successes, and even challenges, professionals appear more relatable and approachable. This shift helps in building stronger connections with clients and peers. However, there's a downside too. Some people portray fake lifestyles—showing off Ferraris they don't own and creating unrealistic expectations. This can negatively affect others' mindsets, making them feel behind and skewing their perception of success. It's disheartening when some in the industry use these illusions to scam others, for example convincing people to invest based on lies and online trickery, and then not returning the money. This misconduct tarnishes the industry's image and highlights the need for caution and discernment on social media.
Overall, while social media can enhance authenticity and connectivity, it also brings challenges that need careful navigation.
Shaz Ahmed, founder of Elan Property Finance
Traditionally, specialist finance has been shrouded in an air of mystery while also having more of a corporate suit-and-tie image. Social media platforms are changing things, and the impact leans towards positive.
Gone are the days of the aloof financial advisor—social media allows specialist brokers to share educational content, positioning them as knowledgeable guides. This empowers borrowers by equipping them with the information they need to make informed decisions. The human element now more than ever is super important; we can use social media to be more relatable, approachable while also being professional and knowledgeable. Not everyone has that skill though, and it is definitely one to learn! However, it's important to acknowledge a potential downside, as not all information on social media is accurate. Borrowers need to be critical consumers and verify information before making decisions. Overall, social media's impact on the professional image of specialist finance professionals is largely positive. It fosters transparency, empowers borrowers, builds communities, and allows specialists to be advocates for good change.
Roger Morris, group distribution director at Chetwood Financial
The simple truth is I wouldn’t have the job that I do today if it wasn’t for social media. It’s enabled me to engage and interact with so many people and I’ve been overwhelmed with the positive reception I’ve received and the connections I’ve been able to make. I learn something from each and every interaction, and I try to use those lessons to tailor my content to make sure it is what followers want and need to hear.
Kim McGinley, founder and managing director of VIBE Specialist Finance
Social media has taught me several important lessons about myself and the specialist finance market. One of the most significant realisations is how powerful it can be for business. Stepping out of my comfort zone to post about myself, my family, and my professional journey has been transformative—by showing the human side of my life, I have been able to build a genuine following and grow my business from scratch, leveraging the connections and engagement through social media.
However, social media has also taught me about the importance of insight. It’s very much a world of smoke and mirrors, where people present selected versions of their lives and businesses. This selective sharing can lead to assumptions and judgments that don’t necessarily reflect reality. Recognising this has allowed me to use social media as a tool, understanding its benefits while maintaining a healthy perspective.
By posting on social media, it’s taught me that you're opening yourself up to others' opinions and judgments, which may not accurately reflect who you are; it's essential to develop resilience and not take things personally, as people may judge you regardless of what you post. It’s also taught me the importance of using my voice for those who don't have one, particularly in an industry where women are underrepresented. I refuse to quiet my voice for anyone, and this experience has reinforced my desire to make a difference, no matter how small that difference may be.
Anastasia Ttofis, co-founder and CEO of iLA
Social media has been a profound learning tool, teaching me both about myself and the specialist finance market. Personally, it has highlighted the importance of authenticity and transparency—sharing my professional journey, including successes and setbacks, has helped me connect with a broader audience and build genuine relationships. It has also taught me to be more confident, adaptable and open to feedback.
In terms of the market, social media has provided real-time insights into industry trends, client needs, and competitive strategies. This constant flow of information has been invaluable in staying ahead of the curve. I’ve implemented these lessons by fostering a culture of continuous learning and open communication within my business. We prioritise staying informed and adaptable, ensuring that our strategies are always aligned with the latest industry developments. Social media has reinforced the importance of being responsive, innovative, and client-focused in all aspects of our work.
WHAT HAS SOCIAL MEDIA TAUGHT YOU ABOUT YOURSELF AND THE MARKET?
Shaz Ahmed, founder of Elan Property Finance
Social media has been a game-changer for understanding both myself and the specialist finance market. I learned many things by using social media for my business, one of which is that responsiveness is king. Social media thrives on real-time interaction, and I have learned the importance of being responsive to inquiries and comments, which fosters trust and positions me as someone who genuinely cares about helping clients.
Social media has also shown me the importance of growing my profile, but not just for vanity metrics—likes and followers are great, but true impact comes from providing valuable content. By strategically participating in relevant online discussions and providing valuable content, I've attracted a targeted audience of potential clients who are already familiar with my expertise, which has streamlined my lead generation process.
Lastly, social media has shown me the power of community building and pulling the curtain back. Sharing insights, case studies and answering questions on platforms like Instagram and Facebook fosters collaboration, positions me as a resource, and allows me to connect with potential clients actively seeking information. Give, give, give and people will naturally come to you.
FRIDAY 8TH NOVEMBER 2024
OLYMPIA LONDON
9:30AM - 4:30PM
Spring goes niche
Spring Finance is laying foundations for growth, setting up a development finance division. The firm’s director of bridging and development finance Claire Newman, and sales director Jim Baker discuss why they are establishing this now, and the sometimes unique schemes and borrowers it will be supporting
WORDS BY BETH URE
Spring Finance has gone from strength to strength since its launch in 2011, lending primarily to customers who may not meet the normal lending criteria of high-street banks and building societies.
In June 2024, the company officially launched its development finance division, which will offer regulated and non-regulated loans. Spring’s bridging division has been lending for more than two years and has already funded a number of development loans, but the new division will bring the product to the whole of the market.
“We have already provided development finance for Spring’s key brokers, but have been selective with the cases we wanted to see and waited for the better market conditions,” explains Claire Newman, the lender’s director of bridging and development finance. “We have now tested our process and worked with brokers to get feedback on it and that, coupled with the improving market conditions, means this is the right time to launch.”
The company’s goal is to become a sizeable non-bank specialist lender, and, with the foundations laid, attention is turning to growth.
Niche borrowers
The product is aimed at sole traders, as well as small and medium-sized property developers, offering regulated and unregulated bridging and development loans.
“It’s an area for which we feel there is a niche, as people in that market tend to have less experience, they are growing their development experience or they may be building their own house,” Claire says. “It’s somewhere we can step in for smaller schemes that larger banks potentially won’t fund, and we can have more of a personal, common-sense approach and work with them closely to meet their funding needs.”
She adds that this approach also offers the opportunity for Spring to build relationships with developers at the start of their careers, leading to more business as these developers expand their portfolios.
While the firm launched its bridging range in Scotland in April 2024, Claire expects only limited appetite for Scottish development finance loans, with the core of the development lending based in England and Wales.
The development finance division offers both regulated and unregulated loans primarily because of the size of the two
“We can step in for smaller schemes that larger banks potentially won’t fund”
markets, explains Jim Baker, sales director at Spring. “Regulated has always been one of Spring’s core product offerings, but it is a limited market. There is a larger need for development finance in the non-regulated space, so it’s a natural place to move into,” he explains.
“We feel very comfortable lending to people who are building their own home provided there is an experienced contractor involved,” Claire adds. “People are more motivated when it’s their own house and they will be living in it.”
Spring has worked with borrowers with a range of credit profiles, particularly smaller developers and deals outside the mainstream. “That really highlights what a specialist lender is—it’s that niche area, taking a real risk-based view rather than a prescriptive view of a deal,” says Jim. “We’ve got broad criteria, but it’s actually about having that skill and ability, and experienced underwriters who can look at a deal, assess the risk, and make a decision.”
Employee ethos
The firm’s underwriting team is crucial to its success, and the new division is set to attract new talent. Emmanuel Johnson recently joined the team as development finance underwriting manager, having previously worked at a number of other lending firms. He is set to oversee the growth in the development loan underwriting team.
“We are very focused on making sure we get people with the right experience, but also the right individuals for the team as a whole that fit with our company ethos,” Claire elaborates. “We always take a personal approach to our work and we want to be someone brokers want to deal with, so anyone we bring in needs to buy into that ethos.”
“A core part of our proposition at Spring is our people, that we are approachable and that we are very hands on,” Jim adds. “When a
deal comes to us, the broker has direct contact with the underwriter working on the case, which is why brokers love dealing with us.”
Managing risk and growth
While the division is a new release in the market, Spring’s development finance processes are already in place, including the funding lines for the new arm.
As the firm seeks to build a business with longevity, choosing the right deals for its new proposition will be a key part of its growth in the coming years. “It’s very easy to write a lot of business very quickly, but getting the right profile and building those strong foundations will demonstrate that we can manage risk and we can manage growth,” Jim states.
The company will also continue to look for opportunities to create products for its clients where they are needed. “That’s what we’re all here for—to create a good outcome for them,” he adds.
“One of the benefits of being a privately owned company is that we can be nimble and, when we make a change, we can do it very quickly, which has a real impact on our use of new technology,” Claire says. “We are very good at asking for feedback from brokers and borrowers and implementing it.”
Jim adds that this has also led to a joined-up business model with close ties between the teams within the company.
As the market continues to develop, Spring is set to move with it, using all the tools it has to offer its service with a personal touch.
G
Uliana Kuzmis
Giant
steps towards a better industry
As the development finance division of Hampshire Trust Bank (HTB) hits new heights, its deputy managing director Uliana Kuzmis shares her experience as a leader and educator in the specialist finance industry, and talks about the bank’s ambitious plans to drive more business and take the sector to the next level
Words by ANDREEA DULGHERU
Photography by ALEXANDER CHAI
“We have established ourselves as one of the most reputable development finance providers in the industry. People talk about us, and want to work with us”
With a new and improved team in place—following the appointment of new heads of distribution and origination, multiple BDMs and a new managing director at the helm—it’s safe to say that HTB’s development finance division is having a very busy year. This is building on the significant success seen since Uliana Kuzmis joined as deputy managing director, in September 2022.
Uliana affirms the division has gone from strength to strength, having just celebrated a record-breaking month of completions in June—doubling the results of its previous most successful month. “June was the best month this department has had in its
entire existence. It feels surreal,” she says. “Normally, it takes a lot to complete a development finance transaction, but we’ve had a stretch where we had a completion every day—sometimes we had three in a day, which is huge. To complete deal after deal is exceptional and I’m so proud of our team.”
She attributes this recent strong performance to the team’s hard work, which has also earned the bank many awards. “We have established ourselves as one of the most reputable development finance providers in the industry. People talk about us, and want to work with us.”
June was also the month when HTB’s development finance division closed its largest ever transaction, totalling £25m—the maximum loan amount it offers. The facility was secured by Commercial Estate Group to build a 1,400-home community in Leeds, which will also feature offices, hospitality and leisure venues, a nursery and transport infrastructure.
A deal of this size is highly complicated, as Uliana explains. “Borrower structures tend to be more complex as companies grow, thus requiring a higher degree of due diligence to ensure we are satisfying all KYC and AML obligations. With bigger developers, there’s also a greater possibility of multinational/ international entities becoming involved. The schemes are also typically more complex in both programme and structure, with various elements moving at different speeds and calling for a comprehensive knowledge of the wider picture.”
In addition, larger and more established clients tend to be more sophisticated and carry higher expectations. This means that ensuring facilities are structured in a way that satisfies all parties becomes more challenging and requires an even more tailored approach.
Surprisingly, despite these factors, Uliana finds large deals somewhat simpler to arrange for one reason: the experience of the borrower. “The actual work with the client to execute the deal is a lot easier than for smaller transactions, because a large borrower will have top-notch professional teams, with the best construction specialists, lawyers, brokers etc.” Therefore, she claims, obtaining information from the borrower to assess the deal—such as construction packages, source of funds and source of wealth information,
legal due diligence and insurances—is much more straightforward, as they understand the importance of providing all the details and essential documents at the right time in a complete package.
This wealth of experience works both ways. “Equally, I’m privileged to have really smart people in my team, who are not only capable of handling complex transactions, but also derive pleasure from them,” Uliana imparts. “Yes, larger deals are challenging, but we take pride in completing them.”
Driving excellence through education
HTB’s recent achievements go beyond lending. Since September last year, the bank has been driving up standards in the development finance market through a series of masterclasses for brokers, led by Uliana.
This initiative came about on the back of the in-house training programme that Uliana implemented for HTB’s underwriting team. “When I joined the firm, we slightly restructured the way the development finance division works, and created a dedicated underwriting function within the team. We spent about a year training them on technical and professional knowledge, with sessions carried out on a weekly basis.”
Uliana would often put snippets of the lessons learned on LinkedIn, which attracted attention from brokers, asking if they could be part of these sessions. “This is when we realised we needed to do something for our brokers,” says Uliana, “to deliver this deep, technical knowledge to them.”
The idea was further reinforced by the response to Uliana’s ‘50 Things I Learned in Development Finance’ series on LinkedIn, in which she’d explain various aspects of underwriting deals, to the delight of dozens of people on the platform (myself included!). “It started as a light-hearted thing, but became a signature mark for me,” she shares. “So many people followed this series, and would stop me at events to tell me how helpful those
posts were. Some people even suggested I should publish a book with the same name, to share these nuggets of information.”
Acting on this thirst for knowledge, Uliana decided to give the industry what it needed, via a series of masterclasses to teach brokers first-hand about the intricacies of development finance. To date, she has hosted two—one in London in September 2023, and one in Manchester in May this year—both of which were extremely popular. “Brokers were chasing us for a place at the first masterclass; we had five on the waiting list for each spot available. It was a huge success, and it demonstrated that there is a massive need for education, in particular in development
“I’m privileged to have really smart people in my team, who are not only capable of handling complex transactions, but also derive pleasure from them. Yes, larger deals are challenging, but we take pride in completing them”
“I care about this sector and everyone in it, not just HTB. I want to look after people and make this industry better, and by doing the development finance masterclasses, we are helping the end borrowers, the people who are building our homes for the future. If I can play a small part in assisting with this, that’s my job done”
“Brokers were chasing us for a place at the first masterclass; we had five on the waiting list for each spot available. It was a huge success, and it demonstrated that there is a massive need for education, in particular in development finance, because it’s such a complex area and most people don’t have that intricate, technical knowledge”
finance, because it’s such a complex area and most people don’t have that intricate, technical knowledge.”
And in the process of spelling out the specifics of the business, Uliana discovered her talent as an educator. “One of the advantages I have as a foreigner is that when I explain technical matters, I use simple language,” she tells me. “I used to feel insecure about my English, but now I realise I can explain things in an easy-to-follow way. No matter how complex the matter is, I’m able to talk through it in a way that everyone, from beginners to experienced people, can comprehend.”
That Uliana loves teaching is clear as well, from the way she talks about the classes and how her face lights up as she reads me some of the feedback notes received from the attendees, which she diligently keeps at her desk. “I’m thrilled and privileged to be able to do this. I care about this sector and everyone in it, not just HTB. I want to look after people and make this industry better, and by doing the development finance masterclasses, we are helping the end borrowers, the people who are building our homes for the future. If I can play a small part in assisting with this, that’s my job done.”
A long road ahead
While her masterclasses are indeed helping to boost standards in the development finance sector, Uliana is fuelled and ready to take things up a notch.
One area she is determined to address is technology, where she believes progress is sorely missing. According to Uliana, this is due to tech providers prioritising much bigger industries—such as mainstream mortgages or BTL finance—that are also more open to automation. “Development finance is a niche, human-reliant business; the process is so complex and multifaceted that it’s very difficult to create a framework around it,” she asserts.
She also points out that for lenders who offer multiple types of finance, the BTL or bridging propositions are usually significantly bigger than development funding. “Individually, development finance providers
are not strong enough to drive that demand, therefore fintech for the sector tends to go to the back of the queue. We are begging for technology, but there isn’t a fully-fledged solution at the moment, just bits and pieces,” she remarks.
Those who know Uliana can attest to the fact that she is a woman of action—so I’m not surprised when she tells me she is currently researching and working on developing a tech solution that meets the sector’s specific needs, is truly fit for purpose and does not use outdated features.
Aside from having a streamlined, logical process that makes sense for the users, Uliana is seeking a platform with two essential things: the ability to pull data from thirdparty agencies, such as Companies House, Land Registry and credit agencies, and to pre-populate fields when arranging deals in a way that saves the user time and allows the lender’s team to focus on the bespoke, human-led tasks.
“The other aspect is transparency: how can we increase the visibility of the transaction journey to the brokers and borrowers?” she adds. While this is a difficult task, Uliana is determined to keep the momentum going, which is why her division is keen to undertake market research to find out what brokers and borrowers would like to get from tech to help increase transparency in development lending. “Creating a development finance tech platform is huge, but if it makes the journey better, smoother, more efficient, we all win from it, so I’m all for it.”
With extensive work for a tech solution going on in the background, and plans for the next several masterclasses to be held in cities across the UK, including London, Cardiff, Bristol and Birmingham—with the next one scheduled for 2nd October in central London—Uliana’s and the team’s schedules look jam-packed. However, knowing that this work will ultimately benefit the sector makes it all worthwhile for the deputy managing director. “This industry needs to improve. It’s difficult, complex and lacks transparency, and there are so many things we can do to make it better—and what we, at HTB, do is just a little step towards that.”
BUILDING A ONE-STOP SHOP
AHEAD OF THE FIRM’S EXPANSION INTO THE REPUBLIC OF IRELAND, WE TALK TO FINANZE’S CEO ANDY KEEHNER AND FINANZE GROUP’S CEO ALASTAIR HOYNE ABOUT THEIR FUTURE PLANS FOR THE BUSINESS—WHICH INCLUDE A ONE-STOP PROPERTY INVESTMENT SHOP AND A WEALTH MANAGEMENT SERVICE
Words by BETH URE
In an industry where providers need to innovate and adapt, Finanze Group is working to be an expert at staying ahead.
As a unique brokerage that creates its own products, the firm consistently works to meet client needs, as well as consider what areas are overlooked in the market.
“We used to have a policy that if three clients asked for the same service and we weren’t offering it, then we needed to start doing that, and we take the same approach to product creation,” explains Finanze Group’s CEO Alastair Hoyne. “Our advantage has always been that we’re well known as a specialist house—even though we do offer standard products as well—so constant evolution and not getting stuck in one way of doing things are crucial.”
Andy Keehner, CEO of the brokerage division, adds: “We’ve picked up a lot of business from complex cases where the existing broker just disappeared because the deal became too complicated for them, but that’s what we thrive on.”
IRISH MOVE
The firm is preparing to expand into the Republic of Ireland, but breaking into such a closed market presents a number of challenges.
“There are probably about 300 or so lenders in the UK whereas, in Ireland, there are only around 15,” reflects Alastair. “We ended up having to look at it from a different point of view because the concept of a corporate finance brokerage didn’t really exist.”
However, this also presented an opportunity for the group to establish a dedicated outfit in the market.
In the days of the Celtic Tiger, the Irish economy boomed and the country’s housing market grew with it, but the global financial crisis left the market struggling and, in more recent years, the Covid-19 pandemic had a severe effect on the Irish economy.
Alastair notes that this has led to higher lending rates and costs in Ireland, usually averaging around 3% in arrangement fees to get into the loan, compared to 2% in the UK. “They’re priced in what in the UK would be specialist lending rather than vanilla, and a lot of them have exit fees, which in the UK you tend to see only on development loans.”
WE ARE HOPING THERE WILL BE IRISH INVESTORS WHO ARE LOOKING
TO INVEST IN THE UK AS WELL, AND OUR CROSS-JURISDICTIONAL KNOWLEDGE WILL COME INTO PLAY
Heading the Ireland office domestically as country head will be Jimmy Keohane, working under the guidance of Andy and the rest of the UK team. He will focus on developing the Irish market, alongside his professional football career as a midfielder for Galway United FC.
The first step of the expansion will involve the group offering property finance brokerage in Ireland before it expands into other areas, such as the business and protection side, as it becomes more familiar with the market.
“We are hoping there will be Irish investors who are looking to invest in the UK as well, and our cross-jurisdictional knowledge will come into play,” Alastair says.
SOLUTIONS FOR ALL STAGES
The firm is also working on its newest division, Finanze Solutions, which will offer an end-to-end service for property investors—from finding the right property to getting the finance to buy it, as well as recommending solicitors, architects and other service providers.
“I meet a lot of new people at different events who often don’t know what they actually need to go through for a property deal, or what professionals you need to speak to,” Andy observes.
“Clients tend to be looking for a one-stop shop, so that is what we’re looking to build as a wider group. However, we started to realise from conversations that there are a huge number of clients in the property world who are very new and worried about being taken advantage of by their suppliers because they don’t know what to do.”
The firm already provides recommendations to clients on an ad-hoc basis, but Alastair notes that this new venture has the potential to provide an organised, holistic solution.
“Often the reason people don’t go ahead with a deal is because they haven’t got the right team around them. We might give someone a quote, but they don’t end up proceeding with the deal as a whole because they don’t have the confidence,” Andy states. “If we can provide their team, they’ve got everyone in place and they are receiving a concierge service.”
The pair say they expect the service to support more than new players in the market, as even experienced clients may be seeking new contacts. While decisions will ultimately rest with the client, the service can offer assistance, including recommending vetting systems and costing software.
“If whoever they have contacted prices the deal completely differently, we can flag that there could be something wrong there, whether there are hidden costs that haven’t been applied or a situation of overcharging,” Andy says.
“We also know from experience that something like getting the right solicitor can make the deal go through so much easier, compared to a client using their own who has done a bit of conveyancing here and there,” Alastair adds. “It’s a real advantage to be able to suggest a solicitor we know is going to do a good job.”
WEALTHY MOVE
Alastair is also involved in the firm’s latest venture, Finanze Wealth, which is due to be launched in September. After being approached by a wealth management firm, Finanze Group was offered an opportunity to licence its brand name for use by the existing firm in order to capitalise on its HNW client base.
“We have developed a strong brand name in recent years and are now in a position where the brand has its own influence,” Alastair says. “Under this new partnership, we are licensing that name so that we can launch Finanze Wealth and use our influence in the market to grow the business.”
While Finanze’s clients are primarily property investors, many are also likely to seek a diversified portfolio and would therefore benefit from broader wealth management services.
He explains: “It was a good fit for us because we weren’t keen on getting involved in wealth management services directly, as the regulations are so onerous and it’s a completely different field within financial services, which carries its own qualifications and requirements. However, the company we’re supporting already has those and the senior leadership have been helping to grow their clients’ wealth for the last 25 years. It was the perfect fit as a result.”
With ambitious plans for the future and exciting new appointments set to join the business, as a group, Finanze is set to become a one-stop shop as it continues to establish services and grow into new areas.
WE USED TO HAVE A POLICY THAT IF THREE CLIENTS ASKED FOR THE SAME SERVICE AND WE WEREN’T OFFERING IT, WE NEEDED TO START DOING THAT, AND WE TAKE THE SAME APPROACH TO PRODUCT CREATION
Mike Kirsopp
Building for the long term
Words by MARCEL LE GOUAIS
Within a year of getting its banking licence, StreamBank became profitable. Now, with plans to extend into new areas, the firm’s CEO Mike Kirsopp talks about how to find gaps in the market and why making solid preparations will help get the next step right
ne of the striking impressions from StreamBank’s CEO Mike Kirsopp is his principled emphasis on delivering on promises rather than headline-grabbing growth figures.
“To me, the most important reputation is that we do what we say on the tin. In other words, we don’t let people down.”
This is his prominent message in the context of the bridging and savings provider’s initial priorities. The Cardiff-based lender has a narrow, specialist product range covering shortterm bridging and development finance, but Mike tells me the business will soon build out its proposition to longer-tenure facilities.
Mike was a non-executive director for three years before being appointed as CEO of the business in February 2024. He was inspired to take the role by StreamBank’s “entrepreneurial focus and approach to a part of the market that has previously seen players come and go”.
“I felt there was the type of experience, culture and ambition to be different, and it has a very enthusiastic owner in Alex Pusco [StreamBank’s founder and NED] who has an infectious personality; his love for the business makes it a great place to be in,” he adds. “We know why we’re here and what we’re trying to achieve. We are building for the long term; it’s a relationship proposition rather than a transactional one.”
In his role as CEO, Mike says he will call upon his experience of running start-up banks, having worked within new market entrants as CEO and chair over a period spanning around 12 years. He recognises
that key insights will come from listening to customers. This, he explains, will mean crafting and growing the organisation in response to what customers say they want from StreamBank rather than “building it, and then seeing if anybody wants what you've actually done”.
Since it was granted its banking licence in February 2023, the lender has attracted more than 3,500 depositing customers. “We've got great technology and we get very strong customer reviews on both the product and pricing, as well as on the seamless way in which they transact,” says Mike.
“To be successful in launching products, very often the amount of preparatory work has to be balanced with speed of delivery”
He explains that StreamBank achieved all of its aspirations for volume lending in 2023, adding that the business “cruised through £100m after about nine months” and finished the year at about £140m at the end of March 2024.
StreamBank became profitable 11 months after securing its banking licence and, according to Mike, has remained profitable each month ever since.
“We're not in the situation where, like a lot of banks, we’re seeking new capital—we have ample sufficiency. It has enabled us to start the 2024/2025 year totally on target.”
Avoiding volatile risks
In a two-year period during which banks have experienced volatility, Mike attributes this early success to multiple factors, including StreamBank’s talent, the efficacy of its messaging to the market and the relationships it has developed with brokers.
The fact that the lender is in a relatively nascent phase of its lifecycle is also relevant. Mike believes the lender’s greatest advantage is that it doesn’t have a back book of lending
that carries both problem debt, as well as customers who may be finding it difficult at this point to manage through the volatility.
On talent, Mike added: “We've built a great team of BDMs under Roz Cawood, our managing director of property finance. We've grown good relationships with brokers, and that's really important—to be clear about what we are able to do and what we want to do.”
“TO ME, THE MOST IMPORTANT REPUTATION IS THAT WE DO WHAT WE SAY ON THE TIN. IN OTHER WORDS, WE DON’T LET PEOPLE DOWN”
StreamBank doesn’t overpromise and under-deliver, he says, emphasising that the business is able to lend quickly and efficiently—keeping customers happy and making brokers’ lives easier.
While he acknowledges turbulence across the industry and the impact of higher interest
rates on homeowners, Mike believes it has been more resilient than expected. “We haven't seen the collapse in property values that was predicted and, while the volume of transactions is lower, it hasn’t fallen as far as people thought. I think the volatility is in confidence.”
Longer-tenure targets
StreamBank, for now, is a specialist in shortterm bridging and development finance, but Mike states the firm will expand into longer-tenure products in the near future, one that will encompass commercial and BTL mortgages.
Product design for this is already under way, which begs the question around a launch date for any offering, though Mike remains tight-lipped about timing. “When will we do it? I don't know—when the time is right,”
he says. He explains the rationale for the expansion: the business is seeing “really good customers” having to move to other providers of long-term products, he says, and StreamBank would like to continue to support them with its own proposition.
Product development will run alongside headcount growth; currently, the lender has around 40 staff and expects to have 50 in place by the end of the financial year.
First steps in product design
When considering any new product offering, the first major step for StreamBank is a listening exercise with customers and brokers. “It's always easier when somebody tells you about a gap in the market, so the first thing is we keep our ears open. Then we watch where our competitors are going—that doesn't necessarily mean we're going to follow them, but it starts to tell us where people believe there are gaps in the market, or trends developing that offer an opportunity,” Mike explains.
“We know why we’re here and what we’re trying to achieve. We are building for the long term; it’s a relationship proposition rather than a transactional one”
Once StreamBank has the germ of an idea, the next stage involves an analysis of whether the lender can offer something better than its peers in a highly competitive market. The CEO states he looks for opportunities where the bank can capitalise on quality of service, seamless transactions and frictionless experiences for customers and brokers.
After this assessment, the business will look at where technology can be brought in to deliver a product and the relative costs of doing so. “All in all, that does tend to take quite a lot of time. But to be successful in launching products, very often the amount of preparatory work has to be balanced with speed of delivery.”
Overall, StreamBank’s priorities for this year will include safe growth, hiring and embedding new employees and undertaking a “quiet, but sustainable delivery of a five-year plan”. The lender expects to see significant growth in both deposits and lending this year. Another key target is bringing in the right quality of personnel as staff numbers increase, and ensuring the business has people who share the same vision for the organisation. But above all, Mike says the major priority is to deliver on the lender’s promise to brokers and customers.
This September we’ll be relaunching our brand and showcasing how our uniquely different approach challenges convention and sets a new standard in specialist property finance.
Journalist goes to brokerB school
Having written extensively about the Certified Practitioner in Specialist Property Finance qualification since its launch last year, it was time for me to get off the sidelines and try out the course myself.
So I enrolled—and it very much expanded my horizon with regard to what the work of brokers involves, and what they need to know
Words by ANDREEA DULGHERU
fter many years of hard work, the first specialist finance qualification—the Certified Practitioner in Specialist Property Finance, or CPSP as many call it—was officially launched in May last year as a joint initiative between the BDLA, FIBA and the London Institute of Banking and Finance (LIBF).
There’s no denying that the journey to building a specialist finance qualification was long and arduous. While talk of this was rumbling in the sector, driven by the voices of Brightstar Group’s Rob Jupp (who, at the time, was running the Association of Bridging Professionals), FIBA’s Adam Tyler, the BDLA’s Vic Jannels and the late Benson Hersh, the idea was quashed by a lack of support from the industry. “At the time, we were in a different market. We hadn’t been out of the global financial crisis for that long, and the market was growing, so people didn’t think we needed this,” recalls Adam. “Producing a specialist finance qualification costs about £90,000—even with us and the other authors writing it for free—so we needed sponsorship from the lenders. However, we didn’t have that at the time.”
A few years later, the winds have changed as have the attitudes of industry experts towards education. Gradually, the thirst for knowledge has become keener—enough for the idea of a specialist finance qualification to quench this. “As we progressed, it became more apparent that there was value in introducing an education programme as the natural next step in evolving the reputation of bridging and development lending as a vital part of the UK mortgage market. Bringing the CPSP to fruition has been many years in the making and is the result of a fantastic collaborative effort from across the sector,” says Vic.
Within little over a year since the launch, nearly 200 people have completed the qualification, and more than 700 are currently taking the course, showing the industry’s desire to improve standards. While the qualification is primarily aimed at specialist finance brokers, Adam confirms that some lenders, including Together, are also putting their team members onto the course.
“As a department, the intermediary sales channel is committed to all having the qualification, and we’ve made it part of our onboarding training and our competency sign-off. We booked 20 spots for half of our department first, with the remaining 20 set to start later,” says Tanya Elmaz, director of intermediary sales at Together. “Quite simply, we’re doing this to get everybody on the same level of knowledge. But also, we want to lead the way and show our industry and our brokers that this is the standard.”
Having heard so much from the creators, authors and people who have already passed the course, curiosity got the best of me—so I ended up signing myself up to try out the CPSP course myself to see what all the fuss was about. While I knew that this qualification would enhance my somewhat limited understanding of the specialist finance market, what I experienced certainly exceeded my expectations.
Fit for a busy lifeB
With just a few clicks and buttons on the MyLIBF page, I quickly reached the Brightspace course website, the LIBF’s virtual learning environment. One of the great things about this platform is it allows you to access the CPSP learning materials on any type of device such as a laptop or desktop computer, tablet and phone, including via an app.
The icing on the cake for me was that I could download the materials and access them without having to be connected to the internet. This was music to my ears, as it allowed me to carry on going through the learning material at any time I desired, particularly while I was travelling to and from work on the London underground—notorious for its lack of stable WiFi. So, instead of filling my usually boring hour-long commute with Sudoku, I would go through a few sections of the CPSP as often as I could.
As somebody with a significantly busy work life, being able to fit in quick study sessions whenever most convenient for my schedule made the whole process of learning a lot easier—and it really showcased the extensive thought and effort the LIBF, FIBA and BDLA had put into making this course as accessible and user-friendly as possible for brokers with even busier schedules than myself.
The content itself is split into 11 topics— covering the different types of specialist finance available in the market, as well as the process of underwriting such loans and various regulatory aspects. Each of these were in turn divided into bite-size chunks to make it easier to digest the information. While I admit I felt a bit overwhelmed at first by the sheer number of mini-sections for each topic—as some have more than 30 to work through—I soon discovered that they were actually very easy to study, and this made the whole learning process more efficient and streamlined. In addition, this came in handy when I wanted to revisit some topics, as I could easily find them in just a quick minute.
The language and structure of the entire course are straightforward and easy to
understand. Specific terms are clearly explained to ensure people with various levels of experience can get to grips with everything. The overall text is structured in concise paragraphs or bullet points, and accompanied by diagrams and fact boxes.
I particularly enjoyed the case studies at the end of several sections, which briefly tested my knowledge gained so far. These allowed me to gauge my understanding and put theory into practice, as well as test my critical thinking. While I am not a broker, I could clearly see how these case studies would help intermediaries looking to arrange such deals, particularly for those with limited experience of broking specialist finance cases.
Going into this fully aware of the magnitude of this course and my very tight deadlines for writing this article, as well as having heard a lot about the CPSP from both the authors and from people who had completed the course, I knew I would be able to complete only a part of this course in the span of a few weeks. However, seeing the level of detail it covered only solidified what I knew: that this is a thorough overview of specialist finance that should be given plenty of time to complete.
Tests with carrots , not sticksB
My favourite part by far was the new online FIBA Academy, which will be officially launched later this year. The platform, created and delivered by Competent Adviser, provides a comprehensive testing system to allow CPSP candidates to assess knowledge gained throughout their studies and prepare them for the final exam at the end of it.
The system offers unlimited digital tests for each section of the CPSP and case studies. These are randomly generated from a collection of over 1,000 questions written by Competent Adviser’s staff, who sifted through the entire learning material compendium for this purpose only. “We don’t launch a training programme with fewer than 1,000 questions,” says Gillian Tait, managing director at Competent Adviser. “The CPSP is a level 3 so a GCSE-type qualification—it’s testing you on whether you have read the book, rather than asking you to do any outside research. When we come across a qualification like that, we task our authors with writing every salient fact that must have a question so we can test that you truly understand what you’ve read. That’s exactly what we did for the CPSP: we had one of our authors study the course, go through the mock paper and sit the official exam.”
“We’ve got to the point where if you don’t have CeMAP , you’re the odd one out. It’ll absolutely be the same with CPSP , but it will take a significant amount of time, and the more lenders , large brokerages , packagers , and networks that champion this , the better”
Based on this writer’s experience of going through the whole qualification, Competent Adviser decided to make the mock test questions tougher than the actual exam so candidates would be over-prepared and have the best chance of passing the official CPSP examination. The end result is a set of four personal development programmes—two for the official course and two for case studies— of two different difficulty levels, designed specifically to enable students to pass with an 80% or a 100% mark. On top of this, the FIBA Academy platform gives access to all the CPSP PDF learning materials, and lets you keep record of the time you spend completing each module to track CPD hours.
As she walks me through the entire platform, Gillian advises me to start with the 80% difficulty level modules, which I did, despite my overly ambitious personality. Each module is split into the exact number of topics and case studies featured in the official CPSP study material to allow candidates to test their knowledge for each subject. There is also a final stage called the “All chapters exam”, which automatically produces mock papers for the entire course, mimicking the official exam paper at the end of the CPSP.
As someone who learns a lot more easily from doing mock tests, I instantly fell in love with this feature. Being able to assess myself whenever I wanted gave me the confidence that I was doing all the right things and helped solidify the knowledge I gained while studying for the CPSP. Aside from the platform being easy to navigate—I was able to start a 20-question quiz on the topic of my choosing within a few minutes with a few clicks—I particularly enjoyed the fact that the questions were automatically generated. This means that no Q&A exercise looks the same, which eliminates the risk of students inadvertently learning the order of the answers rather than the actual facts. “The goal is to have that knowledge and never get
it wrong. We’ll ask you questions relevant to any particular fact in all sorts of different ways but, as long as you understand the fact, you can answer any question however it comes up,” explains Gillian.
The other perk of the FIBA Academy system that I really enjoyed—particularly as I did not have time to fully immerse myself in the full Q&As—was the option of creating custom mini-tests of five, 10 or 15 questions, depending on how much time I had available on that particular day. This way, I got the best of both worlds: I could continue my CPSP studies and mock tests without this interfering with my day-to-day job.
While generating a test was a piece of cake, passing one was definitely harder, as it should be. Each question tests not only the knowledge gained while studying for the qualification, but also your comprehension skills—misread a question or not pay enough attention to the exact phrasing and you pay the price.
However, Gillian makes it very clear that the platform was designed to aid you in your studies, not punish you for a wrong answer. This is why, once you complete one test, the system will give you your final mark, and walk you through each incorrect answer, giving you a simple yet specific explanation why your chosen response was not the right one, and providing you with the relevant information from the CPSP course material to explain what the correct answer is. “When I did all my financial service exams, I would rather have cleaned my kitchen with my tongue than studied, so the last thing I wanted someone to tell me was to read a whole textbook chapter for one small wrong answer. That’s why we created the system as it is to explain what you got wrong, which you can also export as a PDF to study it later,” says Gillian.
As a solo trainee, there was one feature on FIBA Academy that I could not try out: the manager dashboard, which allows senior staff to monitor the progress of their employees
taking the CPSP and identify any areas where they are excelling or may need additional support. However, Karen Rodrigues, head of sales at MFS—who is trialling the platform with five members of her team—raves about it. “From my point of view, it’s great. I can go in and see how the team is getting on with it. If I notice two or three that are struggling with their progress, I can then get on a Teams call with them and talk about this and what additional support they need,” she explains. Talking about her and her team’s experiences trialling FIBA Academy, Karen shares my feelings of excitement and satisfaction. “Myself and the guys absolutely love it—it’s a joy to use. What I really love about it is that if you get a wrong answer, it tells you why, rather than make you read a whole chapter. It gives you that knowledge all the time, which is a godsend,” she says.
Overall, I thoroughly enjoyed both the CPSP course and the FIBA Academy platform. As someone who writes about specialist finance topics for a living, it was fantastic to fully dive into this fascinating world, and quite fun to go back to school again. It also gave me a whole new level of confidence; not only did I gain a lot of knowledge, but I also realised I already knew more than I thought I did before starting this course. And, while I haven’t yet completed the course, I now view specialist finance with different eyes, which I know will further help me in my job as a finance reporter.
Mandate or not?B
With nearly 200 people having completed the CPSP course and more than 700 undertaking it as I write this, it’s safe to say that this specialist finance qualification is picking up
momentum in the industry. However, while Adam and Vic are confident the course will continue to grow in popularity, they both state there’s still a long way to go before the CPSP becomes a staple in the specialist finance industry.
As the qualification becomes more popular, one question lingers in the air: will it eventually become mandatory and enforced by a regulator? While many have pondered this since its launch, neither Vic nor Adam think this is the right step at the moment.
“CPSP is a way for brokers to stand out from their peers in terms of expertise in the specialist property finance sector. We may reach a point in the future where it becomes a hygiene factor that lenders and customers expect, but it was never intended during our planning to be launched as a mandatory qualification. Our remit was simply to offer industry professionals, including lenders and brokers, the opportunity to demonstrate their commitment to and knowledge of the sector,” explains Vic.
That doesn’t mean the CPSP will not become a staple in the specialist finance sector—Karen and Tanya believe that, over the years, as more brokers complete the course and as borrowers become more knowledgeable of specialist finance and look for quality advice, having the CPSP under your belt may eventually become the norm for intermediaries, meaning that those who don’t have it will be left behind. “We’ve got to the point where if you don’t have CeMAP, you’re the odd one out. It’ll absolutely be the same with CPSP but it will take a significant amount of time, and the more lenders, large brokerages, packagers and networks that champion this, the better,” states Tanya.
“I think it will be the lender community that will drive adoption of the CPSP. To see some lenders put multiple people through the course is an indicator of how they think, and the large ones will at some point put their foot down and determine that they’ll work only with brokers who passed the CPSP”
The experts believe this will also be driven by customers looking to work with the best brokers in the market, who will see the CPSP as a badge of quality. “In a world where customers are becoming more and more sophisticated with their knowledge of borrowing, and where more loans are being handled by intermediaries, the CPSP is another tool to show your professionalism to the customer, and stand out from 100 other brokers,” Tanya adds.
Adam strongly believes lenders will play the biggest role in making the qualification an industry standard. “I think it will be the lender community that will drive adoption of the CPSP. To see some lenders put multiple people through the course is an indicator of how they think, and the large ones will at some point put their foot down and determine that they’ll work only with brokers who passed the CPSP,” he elaborates.
However, both Karen and Tanya disagree, saying that MFS and Together are still open to working with brokers who do not have the qualification, as long as they have the experience and knowledge to properly handle specialist finance cases. “At this point in time, because we don’t have enough people who have completed the course, if a lender turned around and said they’d only deal with CPSP-qualified brokers, they might as well shut their doors. However, as it constantly evolves and more people take it, you may one day see some lenders require the CPSP from the brokers they work with—that is definitely not going to happen tomorrow, but rather quite a few years down the line,” Karen elaborates.
There is one thing that all the experts agree on: that the industry needs to get together to further push for the adoption of the CPSP qualification—after all, it’s for the good of everyone.
Picture this: after weeks or months of working on a case for a client, the borrower decides to pull out of the deal at the last minute, leaving you with nothing in return for your hard work. This situation—while not incredibly common—can bring frustration to lenders and brokers who have pulled out all the stops to meet a client’s requirements. With many hours potentially wasted on nothing, this brings the question: should there be consequences for borrowers in the form of abortive fees—and how would this fi t with Consumer Duty? The industry weighs in
IS IT TIME TO PAY UP?
Roz Cawood
MANAGING DIRECTOR FOR PROPERTY FINANCE AT STREAMBANK
can see the reasons for and against charging borrowers abortive fees. There is no denying a lot of work goes into each application, which comes at a cost to the lender and the broker. However, isn’t this just a normal way of business? Many other industries pitch for business which comes at a nonrefundable cost if they don’t get appointed, why should lending be different? The new Consumer Duty regulations emphasise the need for financial firms to deliver good outcomes for consumers, focusing on fair treatment, transparency, and avoidance of foreseeable harm. Considering these principles, the introduction of abortive fees for borrowers should be carefully evaluated. I also think it’s important to understand the circumstances of aborting the loan application, as some of the time they are out of the control of the borrower. This type of fee could discourage frivolous applications, but might also discourage potential borrowers from engaging in the loan application process due to the fear of incurring costs they cannot control, which could lead to reduced access to financial products and subsequently be deemed a form of harm to consumers. Ultimately, while charging abortive fees can help cover the costs incurred during the loan application process, it is essential to consider the potential negative impact on customer relationships and the fairness of such charges. Balancing these factors is crucial, and lenders ultimately find greater long-term value in prioritising client relationships over immediate cost recovery. An alternative solution to penalising borrowers who pull out of loan applications at the last minute could involve several strategies designed to balance the interests of both lenders and borrowers without directly imposing fees. One such solution could be a deposit payable by the borrower at the start of the application process, and refunded upon successful completion of the loan application or retained partially to cover the costs if the customer pulls out. This ensures clients are serious about their application while providing some financial cover for the lender.
OF SALES AT AVAMORE CAPITAL
Adam Butler HEAD
As a lender that does not charge abortive fees, I would be cautious around them. We have seen a couple of live cases with lenders that do charge these, which have moved goal posts during the application, reduced leverage or removed certain benefits, which makes the deal unworkable for the client. I think it is unfair to hold a borrower to these fees in this circumstance, as the offer has changed. There are so many situations where it may not be the client’s decision to pull out, and at a late stage very few clients would/should actually just pull out for no reason. I am against abortive fees and would be more in favour of commitment fees instead. These should be taken upfront and then the lender can make the decision, if necessary, whether they should refund the fee or not, depending on the circumstances of the deal not proceeding and when. These can act in a similar way to an abortive fee, but also get the client’s buy-in upfront, meaning quicker responses to all parties and a smoother transaction in a time where applications are taking longer than ever. Looking at penalising a client intrinsically feels wrong. Many lenders have the right to change their mind on an application and this can even be after the client has invested thousands on reports and legal due diligence—many would not refund the client the costs spent. If the client must bear a risk of this happening, then surely the lender must also.
AT MS LENDING GROUP
Michael Stratton CEO
absolutely think clients should be responsible for abortive fees for the brokers and lenders. It is ultimately up to the relevant parties to have agreements in place which allow for this. Many brokers ask for upfront fees, some lenders have commitment fees, and solicitors want legal undertakings for their fees. The issue with this is competition, as many don’t ask for these—including MS Lending—and therefore if you do ask for them, you become less attractive. What often also happens is you have the relevant documentation making a client liable for fees, but in the interest of your relationship with that client or with the broker, you don’t end up charging the fee in the hope that they come back to you next time with more business. This then sets a precedent that although the borrower has signed acknowledging they owe the fees, they don’t expect the lender to actually follow through. At MS Lending Group, we don’t charge any upfront fees, yet at the same time I don’t expect anyone to work for free. The nature of the business is not all deals complete, and I understand that. However, as a team, we are heavily obsessed with our data, so we see those customers who repeatedly pull out of transactions and we choose whether we work with those customers again in the future.
ISaam Lowni FOUNDER AND MANAGING DIRECTOR OF MERRYOAKS FINANCE
think it is fair to ask for a small fee for work that was undertaken, but not completed. Solicitors and surveyors, for example, ask for fees upfront, whereas brokers and lenders are usually paid upon successful completion of the loan. One clear situation that should incur abortive fees is when a borrower pulls out of the deal after getting credit-backed terms, as the hard work has been mostly done by the broker to ensure they have packaged the deal correctly. As long as any abortive fees are both reasonable/proportionate and clearly outlined from the outset pre-application, I cannot see any reason to suggest Consumer Duty rules would be prohibitive. I absolutely love our clients, and I work hard for them as I would want those professionals that work with me to do the same. So I am overall very understanding, although it is sometimes hard to hide the frustration. The risk to lenders and brokers in these situations can be eliminated if the industry agrees to charge abortive fees. However, in a competitive environment, this can also be on a case-by-case basis, as we prefer not to charge some clients where appropriate. The only alternative to abortive fees would be to charge application fees, which is how Merryoaks works—we charge application fees that will transfer from one case to another if we feel the borrower has acted honourably and the abortive is out of their hands, or we really like them and want to work with them long-term. This filters any borrowers that are not wholly committed to the application, while also providing us a tiny coverage for the cost incurred handling a loan application.
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ARE REGULATED BRIDGING FIRMS HITTING THE CONSUMER DUTY MARK?
As the financial sector marks one year since the Consumer Duty rules were officially introduced by the FCA, we look at how the regulated bridging market has adapted to this significant industry change—and whether firms have got to grips with the initiative, or if its implementation is still a shot in the dark
Words by ANDREEA DULGHERU
Illustration by VALF
At the end of July last year, the long-discussed Consumer Duty was officially implemented by the FCA.
Applying to all UK firms in the distribution chain for products and services sold to customers, these new rules were created to set higher and clearer standards of consumer protection across financial services.
The rules are based around delivering four good outcomes for customers: products and services, price and value, consumer understanding, and customer support. Put simply, they place the onus on all regulated financial firms to ensure and demonstrate that their services and products provide fair value and that they act in a responsible manner to protect customers—particularly vulnerable ones—from harm.
Although the scheme is primarily targeted towards more mainstream retail financial offerings—such as residential mortgages, consumer credit and deposit-taking activities—regulated bridging finance falls under the remit of this industry-wide movement. So, with this slew of new rules in place, will Consumer Duty inadvertently reshape the regulated bridging market?
The timeline of events
The journey towards Consumer Duty started in July 2018, when the FCA—in line with its commitment to review and adapt its regulatory kit to ensure good outcomes for customers are achieved—published a discussion paper titled ‘A Duty of Care and Potential Alternative Approaches ’. As part of this, it invited a range of relevant parties, including consumer groups, trade bodies, regulated firms and industry experts, to share their views on whether there was a gap in the regulatory and legal framework, and potential solutions to mitigate this and offer better protection for consumers.
As many respondents claimed that consumer harm in financial services was “unacceptably high”, the discussion laid bare the need for change. The idea of a new regulatory framework was highlighted in the summary document published by the regulator in April 2019.
Work on this was put on hold due to the Covid-19 pandemic. Then, in May 2021, the subject was back on the table, with the FCA launching the first official consultation on a new Consumer Duty set of rules.
The document proposed a three-pronged approach in the form of a consumer principle that would reflect the overall standards of behaviour expected from firms, cross-cutting rules applying across all areas of firm conduct, and four outcomes representing the key elements of the firm-consumer relationship. A further consultation ran from December 2021 to February 2022.
The final rules and guidance for Consumer Duty were unveiled at the end of July 2022, and firms were given a three-month deadline to agree their plans for its implementation. The rules officially came into force for new and existing products and services on 31st July 2023, and for closed products and services, exactly a year later.
What firms have to do under Consumer Duty
While the actions taken to implement these measures may differ depending on the type of firm and services provided, generally the FCA expects financial companies to charge fair and adequate fees in relation to the level of service offered, make it as simple to change or cancel products as it was to take them out in the first place, and give helpful and easy-to-find customer support, so people don’t give up while waiting too long for an answer.
Moreover, firms are expected to give timely and clear information about products and services (rather than placing crucial details in lengthy terms and conditions) to enable consumers to make good financial decisions; provide products and services that are suitable for their customers; and focus on the real and differing needs of their customers in each interaction and at every stage. A particular focus is placed on identifying customers in vulnerable circumstances, understanding their needs and acting accordingly to meet them. “You could describe Consumer Duty as Treating Customers Fairly (TCF) on steroids,” says
“You could describe Consumer Duty as Treating Customers Fairly on steroids. It’s the same thing in many respects; it’s very principle-based”
“Because of the FCA’s ambiguity around the framework, I think you can be overzealous in your understanding and interpretation of what’s being put in front of you”
Ray Cohen, director at Jackson Cohen Associates. “It’s the same thing in many respects; it’s very principle-based.”
As Consumer Duty automatically extends to regulated bridging, firms operating in this sector have had to review their processes and products to ensure they are compliant. “For example, we’ve introduced AVMs, which we didn’t have before. We focused on speed, and also on making sure that our price and the value we’re delivering to our customers is very clearly documented,” explains Cherim Nicholls, head of compliance at StreamBank.
“For those that are worried about the vagueness of Consumer Duty, that’s potentially where they should be reflecting on their own business”
Others have had to rethink their pricing, to match the fair value stipulated in the rules. Liz Syms, CEO at Connect Mortgages, tells me her firm spent a significant amount of time on this alone, to find a solution that would adequately cater to the different types of advisory services its appointed representatives provide. “We’re not the typical mortgage network—we work with advisers from very mainstream residential mortgages up to complex non-regulated products. So we needed to devise a fee structure that was flexible enough for all the different business models our members have, that wasn’t too restrictive, and that was clear and fair for the volume of work. We ended up dividing the fees into brackets, depending on the complexity of the deals to accommodate this,” Liz elaborates.
Furthermore, Consumer Duty meant that many people working in regulated bridging finance had to become even more vigilant to potential customer vulnerabilities, to ensure that both the adviser and lender identify them early on and take the necessary steps to protect the client. “We proactively ask brokers more questions now; this could be about the fee structure or whether this
was the right deal for the customer. We get mixed responses from intermediaries on this—some are fully involved and tell us exactly what they’ve done, but sometimes we do get resistance to these questions,” imparts Sundeep Patel, director of bridging at United Trust Bank (UTB).
From an underwriting perspective, Sundeep, Gareth Lewis, managing director at MT Finance, and Jamie Pritchard, managing director of sales at Glenhawk, also cite an increased awareness of customer vulnerability as the main change in the light of the new rules. Gareth notes that should any additional questions arise during the underwriting process, these would then be passed to the broker handling the deal for the client, which would naturally extend the processing duration.
However, Sundeep emphasises that this is not a negative thing. “You can’t use speed as a measurement of success here. Identifying certain situations early on helps us complete the deal, but it also goes into the loan servicing post-completion. We’re providing the right support because we identified any potential issues from the outset, and if that means it takes an extra three days to complete the deal, that’s fine, because the longevity of that customer relationship is correctly managed,” he asserts.
Vulnerability is an area where some experts believe there’s a lack of knowledge, as well as due diligence by brokers—in fact, Aaron Noone, director at Master Finance Specialist Brokers, claims many intermediaries working in the regulated bridging space would struggle to name the key characteristics to look out for in this regard. “Vulnerability was one of the major points the regulator thought most advisers were not identifying properly, and I think there is a disconnect, particularly with Consumer Duty, between what people understood vulnerability to be previously, and what it actually is. If you pay attention to the rules, in reality, anyone applying for a bridging loan could be classified as vulnerable,” he submits.
Sundeep shares these views, stating that UTB often has to put in extra work to explain Consumer Duty customer vulnerabilities to brokers it works with. “The pattern at the moment is we identify vulnerabilities, then go back to the brokers to point this out and ask them what they’ve done differently to ensure the customer is protected.”
Aaron adds that a broker’s responsibility under the new rules goes beyond simply identifying vulnerabilities and notifying the lender, to taking the right actions to ensure that the customer receives as much safeguarding as possible. “If I have clients who are elderly, one of the reasons why I might go to UTB, for example, is because I know they’ll do face-to-face ID verification. It’s not just about finding vulnerabilities, but also, what have you done about this? My job is to make sure that it’s the right product for the client.”
Lack of clarity: a silver lining?
The FCA’s ‘Final Non-handbook Guidance for Firms on the Consumer Duty ’ offers general instructions on what to implement and what to avoid in order to comply with the new rules, as well as specific goals to achieve. However, as the rules cover a wide range of regulated firms operating in many specific sectors, defining what exactly constitutes fair value and specifying parameters and requirements to be met around various aspects, such as pricing, is nearly impossible. That is why Consumer Duty is underpinned by the concept of reasonableness— meaning that the rules and guidance must be interpreted in line with the standard that could reasonably be expected of a prudent firm carrying out the same activity in a specific market. “The FCA isn’t just regulating bridging, but rather the whole mortgage sector. So if they were to try to put any kind of specific rules on it, they’d have lots of pushback from bridging people, saying that it doesn’t apply to them,” states Cherim.
Put simply, there is a purposeful level of obscurity in the regulations to ensure the framework moulds to any type of financial firm, which inadvertently brings confusion into the mix. “The difficulty firms are facing with navigating Consumer Duty rules lies in their ambiguity. Fair value, for example, is hard to define as it is inherently subjective, regardless of the area of the market, and requires significant business consideration and rationale,” says Lucy Waters, managing director at Aria Finance. “While we know and understand what the regulator wants to
achieve, the ball is in the court of the business to interpret and deliver its own effective interpretation of these rules.”
Liz points out that for those who have been operating in the regulated sector or are familiar with client compliance, the FCA’s language is something they’re well accustomed to. However, it may be very different for newer players in this space. “If it’s all new to you, I imagine it can be incredibly confusing when the FCA talks about cross-cutting rules and uses specific terminology. People find it difficult to get their head around Consumer Duty compliance because there isn’t a blackand-white rule book. At the end of the day, it’s about doing the best you possibly can by your customer—which we’ve always had with TCF to a point—but now this needs to be fully evidenced in much more detail,” she conveys.
However, even with experience under your belt, it can be tricky to know if you’re on the right path. Sundeep and Gareth candidly share with me that during the process of implementing Consumer Duty, they both had moments of uncertainty as to whether they were doing enough, which led them to possibly overthink the task.
“Because of the FCA’s ambiguity around the framework, I think you can be overzealous in your understanding and interpretation of what’s being put in front of you,” Gareth expounds. “That’s where you start to go down into the rabbit hole and second-guess yourself, and you may come out of meetings asking, ‘Are we doing it right, and have we considered everything?’ At some point, you have to take a step back and assess what the rules are supposed to do, and how you then frame your business, to deal with that.”
While the obscurity can prove challenging, Aaron argues that this is exactly how it should be. He believes the primary thing the FCA is looking for when assessing compliance is the firm’s culture and approach to customer service. “We had the same conversation about whether or not the language was vague when TCF came out, and it’s supposed to be vague. It’s not meant to be a hard line between what you must and mustn’t do—that’s what laws are for, like GDPR for example,” he asserts, adding that the FCA is not a force of evil, or an entity designed to fine you into submission, but is there to check that you’re complying with the standards and the rules laid out to look after your client.
“The difficulty firms are facing with navigating Consumer Duty rules lies in their
ambiguity. Fair value, for example, is hard to define as it is inherently subjective, regardless of the area of the market, and requires significant business consideration and rationale”
“Consumer Duty isn’t a light switch you hit and then suddenly, you do everything differently. It takes a long time to build up, and there’s a lot of cost in that”
“If you’ve ever been in a regulatory audit before, you know that if the culture of your business is pointing in the right direction, the regulator will work with you,” Aaron continues. “For those that are worried about the vagueness of Consumer Duty, that’s potentially where they should be reflecting on their own business.”
Ray concurs, stating there are two main reasons stopping the regulator from being too exacting, the first being the risk of Consumer Duty compliance turning into a tick-box exercise. “If the FCA laid down prescriptive rules, many firms would implement them only for the sake of doing it, without giving them much thought.”
The second reason is the ever-changing nature of financial markets. As the sector evolves on the back of different macroeconomic factors, having a set of specific rules may eventually become obsolete; complying with these rules could in fact be counterproductive, as they may be out of date or not cover applicable variations. “By being non-descriptive, it gives the regulator much more flexibility to check if companies are compliant or not, and to act where necessary,” Ray posits.
“If the FCA laid down prescriptive rules, many firms would implement them only for the sake of doing it, without giving them much thought”
On top of the headaches caused by the application of the rules being open to interpretation, one area of compliance that firms have found particularly challenging is the evidence. As part of the framework, companies must provide documentation that proves how exactly they are implementing the rules, and showcases the good outcomes the FCA is looking for. “I think for most people, it required some kind of system change or development, even if it’s just to make sure you’re recording things in a certain way, so that you can run a report, which then becomes your evidence piece for that,” says Liz.
Most experts agree that putting together this body of evidence was the toughest task of executing the scheme. “We underestimated how much work was involved,” admits Sundeep. “We used external agencies to make sure our documents were as easy to understand as possible, and tested this to demonstrate that we are abiding by the principles.”
Regardless of which steps firms have taken to ensure they are following the regulations to a T—from hiring in-house experts to outsourcing services of external compliance firms to review documents and procedures—one thing is for sure: implementing the framework is no piece of cake, particularly as it is not a one-timeonly process. “Consumer Duty isn’t a light switch you hit and then suddenly, you do everything differently. It takes a long time to build up, and there’s a lot of cost in that,” explains Aaron, adding that Master Finance was preparing for the rollout at the same time as the government “crashed the economy”. “We were trying to manage Consumer Duty and a terrible economic situation, while receiving onerous regulation from the government. But, if anything, we’ve proven our resilience and just how well we can deal with adversity,” he claims. Gareth, Sundeep and Jamie agree, adding that the documentation and Consumer Duty policies have to be constantly checked to ensure they remain up to date, thus increasing the workload.
As to quantifying the exact cost of implementation, Jamie notes that this is hard, if not impossible, as the biggest expenditure is the hours spent analysing the rules and lending policies and training staff to ensure they have their consumer hat on at all times—which takes focus away from other areas of the business.
Roz Cawood, managing director of sales at StreamBank, adds that implementation could be even more challenging for smaller or one-person operations, who may not have as many resources as bigger firms. “If you’re a directly authorised broker, for example, you’re either taking the responsibility for compliance yourself or outsourcing it. And, if you’re doing it yourself, you could potentially overlook things.”
Where do you draw the line?
Fair value is one of the prominent points Consumer Duty is focused on—and one that has brought the long-discussed topic of fees and pricing into the spotlight.
In the specialist finance industry, including the regulated bridging space, it is not uncommon to see preferential rates or exclusive products being offered to mortgage distributors, networks and packagers, depending on the volume of business a particular intermediary firm delivers to said lender.
This means that clients may be able to get a cheaper rate by opting to work with a certain bridging broker—or quite the opposite, could miss out if they are unaware of this, or do not work with an intermediary that has access to these products. So the question is: are preferential or exclusive bridging rates breaking the Consumer Duty rules in these circumstances?
In its guidance for firms on Consumer Duty, the FCA states that its “intention is not to set prices and our rules do not have this effect”. While it expects firms “to think about price when assessing fair value”, it clarifies that low prices do not always mean fair value.
The specialist finance industry is split on this. In pursuit of an answer, Bridging & Commercial ran a poll asking this question, and while only a small number of experts shared their views, the results are telling. Of the 36 participants, 56% stated that these preferential rates should be scrapped under Consumer Duty rules, while 44% disagreed with this statement.
Several experts, including Aaron, Liz and Lucy, argue that preferential or exclusive rates do not break the rules, echoing the FCA’s view that cheaper pricing does not automatically mean fair value. “I don’t believe this is a clear-cut solution,” Lucy states. “As long as a non-discounted product represents fair value, one customer receiving a discount does not disadvantage another. These kinds of arrangements require careful consideration but, if managed properly, do not have to become extinct.”
Aaron and Liz contend that preferential rates in the regulated bridging market are usually reflected in the higher quality of service that the broker provides for both the
client and the lender, thus justifying them and meeting the fair value test.
“How else does a large lender control the quality of what it gets and choose how to support the volume it gets?” Aaron implores. “We secured preferential rates in certain areas, not through our size initially, but through the quality of what we introduced. That quality meant that when the lender was underwriting our cases, they only needed to ask one or two questions, as I knew what information they needed. That then translates into a cost saving for that lender. So I have earned that preferential rate because I do things properly and that saving is passed on to the client.”
Aaron adds that there is no secret potion for how you access good-quality products—the key is to be a good-quality packager. “That being said, there are some people out there who only ask a couple of questions, send through what they can and ask for terms for a deal—which never converts into a completion—and then also charge broker fees. Do these people deserve the same rate as me? No,” he states.
Liz observes that preferential mortgage rates are not as prevalent as one might think, as it is more common for that higher volume of business to be reflected in the commission a broker receives per deal. “For example, a lender might pay a broker that only gives them one or two cases a year 1%, whereas an intermediary that brings them two cases a month might get paid 2%. What can also happen in bridging is that the broker might sacrifice half a percent to get a better deal for the customer—and that’s where you could see some of the differences in product rates,” she elaborates.
The waters are just as murky when it comes to the fees a broker may charge for a bridging loan. Some may levy an additional broker fee for their services, on top of the proc fee the lender is paying them. And, as there is no specific standard in terms of what they can charge for their broker fee, there is a risk that the customer could be overcharged.
Considering Consumer Duty fair value is meant to prevent rip-off fees, it is likely that brokers going down this route will get on the FCA’s radar for further investigation. However, as lenders are often privy to what the broker may charge a client, is there an onus on finance providers to step in and put their foot down if they see a broker potentially breaking the rules?
“We secured preferential rates in certain areas, not through our size initially, but through the quality of what we introduced. I have earned that preferential rate because I do things properly and that saving is passed on to the client”
“Yes, there are some bad apples in every marketplace, but most people in our sector are trying to implement the rules in the right way, so it’s really unfair to go down the punishment route. This should be about teaching, making people learn from their mistakes, and doing the best for their customers”
The FCA’s guidelines state: “Where a firm works with others in a distribution chain and conducts due diligence on those other firms, it should consider the Duty as part of that due diligence”—meaning this should, in theory, make lenders responsible for checking a broker’s Consumer Duty compliance.
This is an issue that Roz and her team at StreamBank have discussed in-depth, and concluded that it is something the lender should shoulder. “It’s a difficult one—we can be transparent in our documentation on what our and the broker’s costs are, and what’s being added to the loan and/or being paid upfront, so clients are aware, but is it our place to say to the broker that they’re charging too much? In the end, we agreed that we would speak to those that charge excessive fees,” she conveys.
Gareth takes this stance beyond pricing, to ensure that brokers have followed Consumer Duty rules when arranging the deals that come onto their desks. “We’ve asked ourselves where our responsibility ends, and whether we are able to push back to a broker introducing the deal to us, considering that, as a lender, you’re always beholden to the people that feed you.” His team wholeheartedly agrees that if you don’t feel that what’s being put in front of you conforms to the boundaries of Consumer Duty or TCF, you are well within your rights as an underwriter and as a business to ask the broker pertinent questions that challenge their understanding of the rules and make sure they’ve actually done their part of the bargain.
Where do we go from here?
With 31st July marking the first anniversary of Consumer Duty implementation—and the start of its application to closed products—experts agree that this is just the beginning of what will be a much wider and extensive journey down this path for the regulated bridging market, as well as all other financial sectors.
As firms are producing their first reports on how they’re complying with the new rules, both Cherim and Liz expect the regulator to provide more specific information about the right and wrong things businesses have done, as further guidance for everyone. “The FCA has made it clear that the reports will be
its benchmark. The regulator will look at a sample across the market and say what it has found to be working well, and what isn’t.”
However, she notes, the FCA is prepared to see some gaps. “It’s not expecting people to be fully compliant—the regulator knows this will take time to bed in.”
Although Cherim hints at fines and sanctions for Consumer Duty misconduct on the horizon, Gareth feels strongly that the FCA’s overarching aim is not to penalise, but rather educate the financial markets in pursuit of doing what’s right and protecting the customer. “Yes, there are some bad apples in every marketplace, but most of the people in our sector are trying to implement the rules in the right way, and I think it’s really unfair to go down the punishment route. This should be about teaching, making people learn from their mistakes, and doing the best for their customers,” he maintains.
Overall, the experts believe that complying with Consumer Duty is a continuous process that will evolve over time as businesses get a firmer grasp of the rules and financial markets change. The next question on the agenda is whether the measures taken so far have been effective, or were just a shot in the dark that didn’t quite land.
If we judge by research carried out by Smart Money People, things are not looking too rosy. In the results of its survey of 2,000 consumers released in late July, 84% reported no improvement in how financial providers treat them following the implementation of Consumer Duty, and 7% reported worsening levels of service in the past 12 months. The top frustrations shared by respondents were the lack of access to human support (48%), a high number of untrained staff (34%), no available phone number (32%) and an over-reliance on chatbots (24%). However, as this was a wider financial study, it is not reflective of the regulated bridging market in particular.
One thing is certain, though: the FCA and the wider industry—including regulated bridging—is moving into the next stage of Consumer Duty implementation. How things will evolve, only time will tell.
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L-R: Alan Cleary and Roger Morris
Guess who’s back
It’s official, the boys are back in town! Industry heavyweights Alan Cleary and Roger Morris shook up the industry in July with their appointments at digital bank Chetwood Financial. With this infusion of talent and experience, the specialist lender is ready to take the BTL market by storm
Words by ANDREEA DULGHERU
Photography by ALEXANDER CHAI
n July, digital bank Chetwood Financial made huge waves in the specialist finance industry after welcoming none other than Alan Clearly and Roger Morris to the business, as chair of its mortgage advisory board and group distribution director respectively.
It’s not surprising these announcements caused such a sensation. With several decades of experience under his belt of building and managing multiple brands—in particular having co-founded Precise Mortgages and led OSB Group’s mortgage brands following the merger of One Savings Bank and Charter Court Financial Services in 2019—Alan has solidified his position as a key player in this market. The same can be said about Roger who, in over 30
years of working in the specialist finance industry, has substantially contributed to delivering education in this market.
For Alan, who was happily living his retired life since exiting the industry in 2021, the opportunity to join the well-funded bank Chetwood Financial as chair of the mortgage advisory board and to work again with some of his former colleagues—including Ian Lonergan, who co-founded Precise Mortgages with Alan and is now Chetwood Financial’s group chairman—was too good to pass.
“The plan I had when I retired was just to enjoy my life and do the things I want to do. I’ve been having regular lunches with Ian since I retired, so, inevitably, we started talking about the industry and what he was up to. This sounded quite exciting to me because, in some respects, it looked like what I had done before in my career but more advanced. So when Ian mentioned Chetwood’s plans to launch into the specialist mortgages market and suggested I should come and help them, I was really excited. It was a chance to work in the space I’d already spent 20 years in, collaborate with people I already know and respect, and challenge existing players in this market. Plus, because I’ve done this two or three times now, I feel I can actually help and make a difference,” elaborates Alan.
For Roger, joining Chetwood Financial was a chance to leave his mark on the specialist finance industry. “When you’re younger, you wonder what you will be defined by in your life. My personal aspiration is to build something that the financial services sector really needs. I truly believe that if you deliver education and knowledge for the most genuine reasons, it will build an academy of inspired people. When I first spoke to Andy [Mielczarek, Chetwood Financial’s CEO], I could tell that this role would allow me to paint my own Sistine Chapel. Also, to join a place where everyone is so passionate about the work we do and how we can do it right is amazing. When you walk around the Wrexham, London and Fleet offices, it feels like coming home,” he says.
Having settled in, the two quickly dived into their new responsibilities and tasks. As chair of the mortgage advisory board, Alan will be providing guidance for Andy
and the wider management team to help Chetwood Financial build its presence within the specialist lending market. “I like a challenge, and I like to grow businesses, so I’ll be pushing the team to do more and explore other avenues,” states Alan.
“Alan is like a personal coach to me,” jokes Andy. “We were talking close to the end of last week; at that point, it had been a long week, but after half an hour of speaking to Alan, I was ready to take on the world again.”
Meanwhile, Roger will be focusing on two major tasks. The first is to boost Chetwood Financial’s distribution by partnering with numerous mortgage networks, clubs, and distributors. He will also deliver educational support and workshops to brokers about various issues in the market—including limited company incorporation for landlords, the latest rental reforms and sustainability in the PRS—building on his experience and reputation as an influential and sought-after speaker about the BTL industry.
Making big moves
Alan and Roger’s appointments and new responsibilities are pieces of a much bigger puzzle: Chetwood Financial’s plans to be a significant player in the specialist lending market. “When we decided we wanted to go into specialist mortgages, we looked at who the best people in this area are—after all, if you want to be the best at something, you have to find the best people to work with, and these guys [Alan and Roger] are indeed the best in what they do,” says Andy.
Both Alan and Roger share this view, and confirm they are keen to further build the business’ culture and team in the right way, with the right people.
The CEO tells me that the decision to expand into the specialist finance industry—specifically BTL—was a natural progression for the business, as it complemented its existing lending and savings products and fit its core beliefs: doing the right and best thing for the customer
“I like a challenge, and I like to grow businesses, so I’ll be pushing the team to do more and explore other avenues”
“For now, let’s get good at BTL and, if the brokers, mortgage clubs, networks, and packagers ask us to launch more products into the market, we’ll look at it. In three years’ time, things will evolve and it’s going to get much bigger and better from here onwards”
“My personal aspiration is to build something that the financial services sector really needs. When I first spoke to Andy, I could tell that this role would allow me to paint my own Sistine Chapel”
all the time. “Plus, the attraction of BTL is that the credit risk is tiny compared to other specialist finance sectors; if you do your job properly, it’s a stable asset class. We don’t want to take a huge amount of credit risk—we’re not in the market of playing silly games with customers for the sake of margin,” he adds.
Andy also believes that Chetwood Financial is well placed to innovate and bring new things into the BTL market, thanks to its diverse funding and support from its investor, paired with the firm’s flexibility and digital capabilities. “We’re willing to do something new. In the BTL market, you have a lot of smaller non-bank lenders, as well as banks that are bigger than us and more set in their ways. We have the opportunity to do some new and interesting stuff in the middle,” says Andy.
Two pronged with two brands
Chetwood Financial’s entry in the BTL market is taking a two-pronged approach: the business intends to provide BTL loans through both its new ModaMortgages brand—which is under development— and through the long-standing firm CHL Mortgages for Intermediaries (CMI), which was acquired by Chetwood Financial at the end of May this year and will be trading using the CHL Mortgages brand. “One of the advantages of having a big private equity fund as a shareholder is you always get opportunities for acquisitions, and we’re always looking at these. We looked at CMI and we were blown away by the quality of the team; they have the right attitude to people and customers, and that’s not always the case in the industry,” elaborates Andy. Despite the short time that has passed since the acquisition, Andy tells me that CMI’s business has already expanded
significantly, with monthly application volumes having already doubled thanks to the access to better funding costs, and new credit policy and BTL products being implemented.
Andy explains that the acquisition of CMI gives Chetwood Financial a foothold in the BTL industry while work continues on ModaMortgages. At the same time, it allows Chetwood Financial to both further expand the existing relationships CHL Mortgages has with brokers and borrowers; and build a solid distribution base for ModaMortgages ahead of the brand’s launch. “Starting a new lender, honing your proposition and getting people to trust that new business takes time—as good as Roger is, if I asked him to go out and explain the new lender, that’d still take time. So in some ways, CMI gives us a running start,” says Andy.
While at first it may seem counterintuitive to acquire a BTL business when you’re trying to launch your own, Andy explains that CHL Mortgages and ModaMortgages will have different approaches to BTL lending that will complement each other and allow Chetwood Financial to cover a wide area of the market. “What ModaMortgages is trying to do is focus on the more standard cases that can be done quickly, whereas CHL Mortgages allows us to do the more complex BTL deals that require a more in-depth, manual underwriting, with online capability. Put simply, the two propositions will stack up together. If it’s a complicated case, CHL Mortgages is there for that and, if it’s an easier, more vanilla BTL case that the borrower wants done as fast as possible while getting good pricing and great service, that’ll be for ModaMortgages.”
With Alan and Roger adding significant manpower to the team, Chetwood Financial is now concentrating on finalising the ModaMortgages brand ahead of its launch. “We don’t want to launch a brand that says we’ll be smarter, faster and simpler and then find out that the platform’s none of these things and will burn our service [and alienate our distribution base],” says Andy. “We don’t like to promise and not deliver, so we’re being circumspect on how we enter the market.”
While the primary focus is to make its mark on the BTL sector, the trio make it clear that this is only the beginning in terms of Chetwood Financial’s plans within the specialist lending market, as the team is open to entering other areas of specialist lending at a later time as the business evolves. “For now, let’s get good at BTL and, if the brokers, mortgage clubs, networks and packagers ask us to launch more products into the market, we’ll look at it,” says Alan. “In three years’ time, things will evolve and it’s going to get much bigger and better from here onwards.”
As for the group’s ultimate aspirations, it’s simple: growing to be a significant player in the specialist finance market but in a sustainable way. “We want to build something that will endure. Within the specialist mortgages market, I want people to say we’re the best and the biggest—that’s part of the reason for having Alan as my personal coach” concludes Andy. “Our aspirations are unlimited but, ultimately, we want to make sure we stick to our values and do the right thing for our partners and customers.”
‘My goal is to achieve excellence, and the way to do this is by ensuring nobody can match our turnaround times’
MARK TOLAND
With more than 10 years of experience working as a solicitor within specialist property finance, Mark Toland knows the legal ins and outs of this area by heart. Having joined Russell-Cooke as senior associate within the real estate department early last year, and proven his expertise by completing speedy legal work—leading to bridging deals being completed within eight to 10 hours—Mark is now ready to kick things up a notch, and build and lead on the firm’s new bridging finance capabilities.
With new recruits on the way and several lenders expected to join its panel this summer, Russell-Cooke is getting ready to make its mark in the bridging finance legal space. Talking to us, Mark shares his views on the secret of building a successful specialist finance legal division, and why sometimes less is more in business.
Words by ANDREEA DULGHERU
by ALEXANDER CHAI
Photography
Mark Toland
What attracted you to join Russell-Cooke?
Russell-Cooke has a very good reputation in the market for its real estate capability. It has around 60 solicitors who specialise in various aspects of real estate, which is really impressive. When I was interviewed to join the firm, I was offered the opportunity to build a new bridging finance team. My career goal was always to run a department or my own law firm, so I really liked that challenge, because this meant I could come in and start more or less from scratch within the context of a hugely successful and supportive real estate team. Joining Russell-Cooke was a great chance for me to use all the best practices I’ve learned from my previous roles to shape up the new offering.
What have you learned from your previous jobs that will help you create and develop this team?
I’d say the main thing is the trifecta of communication, speed and client relationships. Also, it’s important to have the correct team set up so you can maintain excellent communication and deliver the best service. At a previous firm I worked at, their USP was that you’d never have a paralegal working on your file. That’s all well and good until you have a high workload—when that happens, lawyers tend to prioritise the active files, rather than a requisition on a previous one, for example, which means you get a bottleneck of cases. This is where a paralegal could help.
What is your strategy to establish your foothold in what is a very competitive bridging market at the moment?
My goal is to achieve excellence, and the way to do this is by ensuring nobody can match our turnaround times while maintaining the highest quality. What you normally find with successful law firms is that they get a lot of lenders on board and take on a significant amount of work only to realise that they can’t keep
up with the demand. We will make sure we always have capacity to deal with our cases without compromising either on quality of work or on staff wellbeing.
Part of our USP is also the relationships we have with clients. Russell-Cooke has a large real estate department and has clients in this sector that we can bring in front of lenders. So our goal is to set up client events to allow lenders and existing real estate clients to network with each other.
What are your plans and targets for this year?
In terms of recruitment, we are currently interviewing for several roles to ensure our standards, service and turnaround times do not drop. We have recently taken on legal work for Castle Trust Bank, and we are working on onboarding several other firms, including Albatross Lending Group, onto our panel of lenders we work with, which is all very positive news. With this in the works, I want to make sure that the level of service is excellent and that our new team members are well trained to handle the workload, which will probably take a few months.
You have been acting on behalf of borrowers for transactions—how different is this from working for lenders, and what are the challenges of acting for bridging borrowers specifically?
When you're acting on behalf of the lender, there's so much standardisation. You have a standard list of enquiries and their documents, so you're familiar with everything, which means I can generally answer queries from the borrower’s solicitor without needing to check with the finance provider. In addition, lender clients are savvy—they know what they’re doing, they’ve drafted their documents and they are very familiar with how it works, whereas a lot of borrowers don’t know the real estate transactional process.
Borrowers can be more problematic because they might not give you certain
documents, for example. Plus, when you’re working for a borrower involved in the purchase of the property, you also have to deal with the seller’s solicitor as well—so you’re actually dealing with two sets of solicitors for one deal, which slows you down. This is why, when we’ve acted for borrowers on previous transactions, we’ve been proactive and done our best to anticipate a lender’s legal needs. Being savvy to a lender’s requirements before you even start the legal process can cut off half the problems when you’re acting for a borrower.
You have recently completed a few bridging deals within 8–10 hours. What is the secret to completing the legal work for bridging finance so fast, especially considering that everyone blames lawyers for transaction delays?
Having a good relationship with a solicitor on the borrower side who knows what they are doing is key. Being able to identify any material issues early to enable solutions to be found also prevents delays. When you’re acting for a borrower yourself, if you want to complete the due diligence quickly, you also need to factor in a phone call to go over all the legal requirements and documents once you’ve sent them over via email. This way, you get everything set up for the deal quickly and properly the first time around.
Another key thing is the experience of the solicitor. I’ve dealt with a high volume of work throughout my whole career so it’s very unlikely that I’ll get stuck and not find a solution to fix any issues. For the particularly speedy cases I’ve completed, I knew how the lender worked—I’ve worked with them for so long that I am very familiar with their legal requirements.
In your opinion, what is needed in the specialist finance legal system to raise standards and boost the performance and reputation of all bridging lawyers?
I don’t think I can sit here and confidently say “If X didn’t happen in every case, things would be better”. I believe that people have already picked up on all the stumbling blocks and are navigating them as best they can. The only thing I’d say would help is if borrowers’ solicitors became better versed in dealing with bridging and specialist finance.
The Solicitors Regulation Authority code of conduct dictates that you can’t work on matters in which you’re not qualified, so solicitors who are giving legal advice for bridging without the expertise are already walking on shaky ground. However, bridging is very niche, so it’s not something that most borrower solicitors would actively learn about if they only act on a handful of deals.
I suppose one solution for this would be for lenders to give borrowers a list of standard legal requirements to pass on to their solicitor ahead of time so they can have a head start before the legal process for a deal begins, but this would probably a bit messy and work intensive, and might even be taken the wrong way by some solicitors who already know how to handle this work for bridging deals. It’s tricky, and there’s no magic solution for this.
In terms of tech innovation, I think it’s only a matter of time before AI starts coming into play for legal work and is adopted into our practices in some way. The only real problem with this is that I can’t see anyone wanting to insure this.
Words by JON YARKER
From pub to post: Is LinkedIn the right place to air your
dirty laundry?
Brokers and lenders alike are becoming more willing to hit social media to highlight bad practice—but is this coming at a cost?
ove it or hate it, LinkedIn has become popular within the specialist finance industry. Some lenders and brokers are increasingly active on the platform and use it for more than connecting with peers and sharing content. They now post about perceived poor practices in the industry, highlighting unethical behaviour and even naming and shaming guilty parties.
With the right number of reposts and likes, a LinkedIn post can spread like wildfire, more quickly than an article on a trade news website. However, many in the industry are questioning the merits of using this social media platform to vent about professional frustrations. Michael Street, founding partner at Word On The Street, is not a fan of doing this.
“It doesn’t sit well with me when people call somebody out on LinkedIn for a few likes,” says Michael. “It shows bad practice and a poor attitude to collaboration. I get that lenders, practitioners and brokers can have bad days and not perform, but there is a professional courtesy in parting ways amicably and leaving it at that.”
In agreement is Chris Oatway, co-CEO at LDN Finance. Like Michael, he understands the temptation to publish these kinds of posts. While he recognises this can come from a good place, he warns about a public response via LinkedIn. “They need to remember there are often two sides to a story,” says Chris, who argues a more measured response could be more constructive.
“It doesn’t sit well with me when people call somebody out on LinkedIn for a few likes. It shows bad practice and a poor attitude to collaboration. I get that lenders, practitioners, and brokers can have bad days and not perform, but there is a professional courtesy in parting ways amicably and leaving it at that”
“Those who are seeking to educate others and assist them in ensuring mistakes are not made in the future can help the industry move forward,” he adds. “However, a bitter, angry and emotional post designed to get revenge on a company or individual will not reflect well and there is little upside.” This speaks to the tone and content of such a LinkedIn post.
Name and shame: yes or no?
One of the social platform’s strengths has been the way it has allowed professionals in many industries to share experiences and best practices. Conversely, there is a recognition that LinkedIn can be used to highlight negative practices in the industry, and Ross Commercial Finance’s managing director Emma Ross sees no issue in this.
“I think it’s fine as long as it’s not naming and shaming an individual or a company outright,” says Emma. “It is good to highlight issues in general terms though, for example asking ‘Are underwriters taking longer for a decision?’ and getting the general feeling if this is the case across the board.”
Some are more willing to name and shame. Aaron Noone, director at Master Financial Specialist Brokers, has explicitly criticised people on LinkedIn before—and says he would do this again.
“I am a firm believer in justifiable loud speaking,” says Aaron. “If someone exists in this industry pretending to be a good leader or using a job title to imitate professionalism and equality with FCA- regulated business leaders, I will call it out.”
Here, Aaron makes a comparison to sites such as TrustPilot and Google Reviews, which allow people to openly criticise businesses and professionals. For him, this comes down to individuals choosing whether they want to air their private opinions, but he argues a moral responsibility can arise too.
“As an industry, we are grown up enough to police ourselves and we have a responsibility to the people we care for in more vulnerable positions or without a voice,” reasons Aaron. “Some cannot speak up about the darker side of the industry—so the more of us who stand up and loudly declare that unacceptable behaviour has no place here, the better we all can be.”
There are risks to this approach, however. Callum Taylor, CEO at Portway Finance, sees no issue in airing grievances online, but warns against naming individuals. This, he argues, can damage someone’s business or livelihood, especially when they aren’t able to defend themselves.
Nonetheless, he recognises that naming and shaming can be used to hold others to account. “I have been in the position where I was forced to post on LinkedIn to make a lender refund money owed to a client because they believed they were bulletproof,” he recalls. “The threat of them being named made them take action and therefore, on that occasion, it was a very powerful tool.”
When posts backfire
If a lender or broker sees bad behaviour in the industry and decides to post about it, they may ironically end up damaging their own reputation more, warns Shaz Ahmed, director at Elan Property Finance.
“You run the risk of being seen as unprofessional depending on your approach. Calling someone out publicly is never recommended,” says Shaz. “Some potential clients may get turned off if you are seen as combative and volatile, even if your heart is in the right place.”
According to Shaz, this can even lead to a professional being shunned as the industry is a small world. LDN Finance’s Chris agrees, and says the more someone uses LinkedIn to complain, the more they will become known for this.
“I am a firm believer in justifiable loud speaking. If someone exists in this industry pretending to be a good leader or using a job title to imitate professionalism and equality with FCA-regulated business leaders, I will call it out”
“If the regularity and content of the person’s posts becomes what they are known for and the moment things don’t work out for them personally they shout it out on LinkedIn, it could prevent certain businesses working with them in the future,” explains Chris, who points out that the nature of the social media platform means it can distort these communications.
A lender or broker may call out an individual for perceived bad practices and receive numerous reposts and likes as a result, but this may not necessarily be a good thing. These interaction metrics may be eye-catching, but they can be misleading too, warns Chris: “[A
“Our industry is built on connections, relationships and, largely, friendships. Everyone has the right to speak freely, Just be prepared for a defence—if you’re ranting about something that was actually your error, you may come off worse”
person] may post multiple controversial experiences and see plenty of reaction but what they don’t see is the number of people cringing and it rings an alarm that says stay clear of dealing with them.”
The veracity of claims made in a public forum such as LinkedIn has to be solid. Aaron may be a staunch advocate of free speech and calling people out by name, but he concedes this is an approach that is difficult to retreat back from. It is the responsibility of individuals to ensure what they are posting is factually accurate, he points out.
“Our industry is built on connections, relationships and, largely, friendships,” he notes. “Everyone has the right to speak freely, Just be prepared for a defence— if you’re ranting about something that was actually your error, you may come off worse.”
Social media versus formality
Unsurprisingly, some companies have social media policies in place that seek to limit employees’ use of these platforms to vent and call out perceived bad practices. Valentina Kristensen, corporate affairs director and public relations expert at OakNorth, says the firm has a formal LinkedIn policy in place. She explains this is important for two reasons—to be in line with the tone of the bank’s brand and to meet FCA social media and customer communications guidelines.
“The world is a surprisingly small place and airing your dirty laundry in public rarely yields the desired outcome and can often make you look unprofessional,” she says. “If you don’t feel an individual or company has behaved appropriately or professionally, and want to warn others, there are formal avenues through which to do this, such as the Property Ombudsman, the Financial Ombudsman, the NACFB etc.”
These formal avenues are available to brokers and lenders, but there is a reason some turn to LinkedIn. While Portway’s Callum doesn’t use social media in this way, he sees why some will out of frustration.
“Associations could take more action with regards to complaint handling, and maybe more can be done when onboarding new brokers or lenders to panels or associations,” he says. “On the whole, I don’t think there is an easy solution—a large part of the market is unregulated so practices will always be harder to manage.”
It can also be useful to move offline. Shaz recommends attending in-person events to have real-life conversations. Here, valuable nuances can be observed that would be missed online.
“The benefits of in-person education and presentations are the interactivity, the ability to get tone across (in a way that static posts just cannot) and the way you can read the room and tailor the content if needed,” he says. “Brokers, lenders and other people within the industry would definitely benefit from more face-to-face seminars, supported by their firms.”
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As with any other career, one thing is key to success in specialist finance: learning the ropes from the best in the business. Mentorship has a great power to develop talent and support staff within companies and consequently in our market.
However, just like specialist finance, mentorship is not a one-size-fits-all approach for both mentor and mentee. Individuals learn, address workplace issues, impart knowledge and set examples in different ways.
As the industry becomes more and more focused on education and raising standards, we wanted to shine a spotlight on some of the industry’s biggest role models and learn their approach to mentorship, and see their success stories through the eyes of some mentees with first-hand experience.
Starting off the series is none other than industry stalwart Danny Waters, CEO at Enra Specialist Finance, who is joined by two of his most successful mentees, West One’s head of bridging Tom Cantor and head of development finance Guy Murray. The three share their experiences of the mentor-mentee relationship, the ups and downs and what this dynamic has taught them both professionally and personally.
Andreea Dulgheru: Danny, you started your career in the finance industry at 17, so I’m assuming you’ve had quite a few mentors over the years. How hard was it to learn the ropes and get to where you are today?
Danny Waters: It was very hard because I came in with very little knowledge about the industry, and I was as green as grass. I was really lucky that the first person who employed me was a brilliant business leader. Since it was a very small company, I got to spend a lot of time communicating directly with him and learning the ropes in close proximity. I was very young when I came into the industry, whereas Tom and Guy were older than me when they started working, and both had a much better context of the industry. I just simply fell into it when I decided I needed a job; that one I took was reasonably close to my house, and it just happened to be in the mortgage industry. From then onwards, after learning about the industry for a short period of time, I realised there was something quite fascinating about it, and I started enjoying being a dealmaker and the other progressions that happened within my career. I’ve been in the industry for 23 years now, and I still don’t know it all by any means; I’m constantly learning new things about people, or new products and markets that our firm is exploring, and that’s the great part of the job. Being able to evolve and make the transition between various products with different people keeps this job really interesting for me.
AD: Out of all the mentors you've had throughout your career, does anybody stand out in particular?
DW: There are a couple of people, actually, within two distinct periods. The first mentor would be a gentleman called Paul Rose, who was a founding director of Enterprise Finance—the brokerage business we consolidated with Vantage to create Aria Finance. He was a brilliant, shrewd individual who was really focused on managing a cost base—a skill I learned from him that is still with me today. He was always focused on the details, which I think is really important. I met my next mentor around 2013—so about a decade into my career—which was when the business was transitioning and starting to grow exponentially. We had a gentleman called David Campbell join the business’ board—he was a former investment banker turned entrepreneur, and led an MBO private equity back then for Bridgepoint. What he taught me was to always think big. Looking back, there’s actually a bit of a contrast between what I learned from each of them: one mentor told me to sweat the small stuff, focus on the details and make sure that every pound is a prisoner, while the other told me to never limit my ambition, think big and focus on maximising big opportunities. The other thing David taught me was how to communicate within the institutional investment world. In our business—and in any business in the mortgage lending space—being able to raise capital is vital, so being excellent in a capital-raising environment is really important, and David taught me the skills to be able to do that confidently and competently. Paul, unfortunately, passed away quite early on in my career, but I’m still very close friends with David. It’s nice to be able to rely on him, and I know that if I'm ever going through anything that's particularly challenging, I can speak to him and use him as a sounding board in an environment which is safe for me.
“I’m always open to learning snippets from everyone, and I find that the best pieces of information that I get are no longer from one person—they’re from a pool of people”
Tom Cantor
Tom Cantor: Your career has been and is amazing from where you started and where you got to. I’m guessing it wasn’t always up—there must have been downs as well. How did you deal with and overcome these? What I find tough, sometimes, is when things don’t go to plan, and you can’t predict certain things that happen.
DW: There are a couple of obvious things that stand out to me, real low moments in my career. The first was the global financial crisis; living through that era, when liquidity just disappeared from the entire financial markets, was super challenging, and there was nothing that one individual could do, no matter who you were, to try to solve that problem. All you could do was just the best within your control and stay in the game—that was a big part of it. It was really important just to make sure that you kept your presence in the market so that when green shoots would appear—and they did—you would have a first-mover advantage. The other moment that I can think of is when we had signed a deal to sell a significant stake to a business in 2016, which was for a lot of money. The deal was signed, subject to one thing, which was called a material adverse change clause, and that clause was in relation to the UK remaining in the EU. At the time, I thought there was a 10–1 shot that there would be a vote for remain within the EU and that we wouldn't leave, so I was quite confident that that deal was going to take place. I remember staying up the entire night, watching all of the votes come in, and we obviously left the EU—so that deal, which was worth hundreds of millions of pounds, fell away. I had not slept in 24 hours, and saw my net worth decimated in a moment that was completely outside my control. I remember I had to go into the office—because there were 150 staff at the time and 15 other people in the management team who owned equity stakes who were in the same shoes as I was—and galvanise the troops because they were all on the floor. The city of London was like a ghost town. But you know what? We used adversity as opportunity. Everyone thought that the market would become dislocated, and it did for a very short period of time, but then we continued to trade well, the deal got resurrected four or five months later and everything was fine. It’s a long-winded way to answer the question, but having lots of endurance and resilience is key.
AD: At what point would you say you transitioned from being a mentee to mentor?
DW: I believe you can be both at the same time; they’re not mutually exclusive. Just because I'm looking for people for guidance and support doesn't mean that I'm prohibited from doing that for people within our executive team. You can definitely be both. The challenge is, as you become more elevated in your career, there are probably fewer people that you can really lean on to be a mentor. But at the same time, my job is to pass my knowledge to both of these guys [Guy and Tom], and many more people within our firm. And the important thing, as a mentor, is to be yourself. You have to be authentic. Guy Murray: I have a question, actually. I can imagine being CEO can sometimes be quite isolating. Who do you look towards for guidance these days?
DW: I still touch base with David. It’s not guidance that I need so much any more, because I’ve done it for a long time. It’s usually venting, like you’re in therapy. Sometimes you just need to share your problems. My wife Lucy [Waters, managing director at Aria Finance] is the obvious go-to person for me— her being in the industry is helpful because she knows most of the characters involved, and she knows me and my personality intimately, so she can often guide me. And then I have a few friends, usually ex-colleagues, who have a highlevel understanding of the market. People sometimes see me as a walk-on-water CEO who doesn’t have issues; that’s nonsense. I’ve probably got more issues than most people because I’m running a big business, so I need to vent sometimes. That’s not to rule out that in the future, I won’t have a mentor though. These things don’t tend to be prescribed, but rather happen by chance. I’m always open to learning snippets from everyone, and I find that the best pieces of information that I get are no longer from one person—they’re from a pool of people.
“Being able to work with someone who has done it himself, especially at a young age, is quite inspiring, and having access to this knowledge early on is really beneficial”
“Everyone’s got different management styles so, while we may want to replicate what Danny does, sometimes it’s a bit unnatural to do the same thing. It’s all about learning what to do and how to do it, but in your own style; you have to stay authentic to who you are and how you operate”
Guy Murray
AD: Tom and Guy, how do you feel about the opportunity to have been and still be mentored by Danny, and what was the biggest lesson you learned from him so far?
“The biggest takeaway I got from my mentors, which I pass down to my mentees, is to think big. Whatever you think is the most that you can achieve, there’s probably more that you can squeeze out of the lemon, so don’t put limits to your aspirations and ambitions”
TC: One of the main benefits of being mentored by Danny is just the direct contact you have with him on a daily basis. I started my career in finance as part of a graduate scheme at a bank, and we had mentors and people who we could talk to, but none of them were business leaders—they were all teaching us just theoretical things. With Danny, he's been in our shoes and done all the jobs, so he knows all the tips and tricks and has all this experience of working in every area of the business. The opportunity to learn from somebody who's been through everything is invaluable not just when you're starting out, but at any stage in your career, because he's got the benefit of real-world experience and examples. If we ever come across a scenario that we haven't seen before—which we do on a daily basis—having the opportunity to call him or walk into his office to run ideas or opportunities, or get examples from him that are relevant to the situation is priceless. GM: Yes, I feel the same. Looking back to when I joined the business nine years ago, when it was a bit smaller, it was probably easier to have access to a mentor like Danny. Being able to work with someone who has done it himself, especially at a young age, is quite inspiring, and having access to this knowledge early on is really beneficial.
DW: From a mentoring perspective, it’s important to point out that we didn't specifically recruit these two individuals to be business leaders and to be mentored by me—they've earned that right. They stood out from the hundreds of other employees within the business, and really distinguished themselves, showing that they have the ambition, courage, talent and intellect to be able to do an important job for our business. The other interesting thing is the fact that they’re both quite young, relative to the positions they hold within our organisation. They probably manage over £1bn of funds between them, so that's a big job, but we trust them because we've seen them develop within our own industry—they've learnt the technical ability needed for these jobs and the management style, culture and DNA of our organisation. I find it much easier to allow these kinds of people to take over the big jobs in our organisation, as we grow and scale the company.
AD: Would you say that part of your management style and the secret to being a good mentor is giving them the freedom to take charge and implement their vision, while also not being afraid to fail?
DW: Yes. It’s a balance—you can't just give them the keys and say “Get on with it” because there's too much at risk. But you do have to, as a mentor, sometimes bite your tongue and allow them to take a course of action that you might not necessarily have taken. Occasionally, you might be surprised and it might end up with a better outcome than you were expecting while, other times, they can take a hit—but they need to learn for themselves. Just being told what will happen isn’t the same as actually seeing it play through, then having to deal with the consequences of your actions yourself. And seeing them perform really well and succeed in something that may surprise you is a real buzz.
AD: Tom, Guy, now that you are mentors yourself, you must feel the same satisfaction to see your team members succeed as well.
GM: Yes, definitely. Also, part of why we’ve been very successful is the fact that Danny wants our business to be the best and a leader in this space—he delivers this message of excellence to us, and we have to keep that momentum and deliver it down through the management chain. That said, everyone’s got different management styles so, while we may want to replicate what Danny does, sometimes it’s a bit unnatural to do the same thing. It’s all about learning what to do and how to do it, but in your own style; you have to stay authentic to who you are and how you operate.
DW: I agree. To have 15 people exactly like me running around the organisation would be a disaster. [laughs]
AD: Is there a particular key lesson that your mentor has told you, that has really stuck with you, and shaped up your career?
TC: Oh, for sure. I came into the business not knowing very much about the specialist finance industry, and I remember Danny telling me to always live on the side of paranoia. At the time, I was probably a bit naive and too gullible but, as you get through this job and you understand the complexities of the industry and the agendas that sometimes people have—especially when they're trying to borrow large sums of money—living on that side of paranoia is actually a healthy state of mind, because you keep yourself aware of what’s going on.
GM: For me, there are a lot of things that have stuck with me. One would be to work as hard as you can to stand out, and make sure you put in 110% effort into everything you do. It's also about having principles that you stick to, especially in lending—you've got to be quite principled about how you make decisions, and be consistent over time. On top of that, it’s important to always look forward and drive everyone forward, because we don't want to sit still. It's always about looking ahead and figuring out how we get better every day.
AD: Danny, are these pieces of advice that you got from your mentors and passed them down to Tom and Guy, or things you’ve learned yourself as your career evolved?
DW: They’re mainly based on my experience. The thing that I try to reinforce to the team is they should never lose any money. Also, paranoia is healthy—you don't get knocked down by the bus that you see coming. These are the kind of things that you'll hear me say to the team regularly. The biggest takeaway I got from my mentors, which I pass down to my mentees, is to think big. Whatever you think is the most that you can achieve, there's probably more that you can squeeze out of the lemon, so don't put limits to your aspirations and ambitions.
AD: Guy, going back to something you said earlier—now that you and Tom are in a position where you mentor people yourselves, do you sometimes find yourself comparing your management style to Danny’s?
GM: Yes, he's been successful, so you want to make comparisons, which I think is important because you want to show consistency from the top down, especially through management and how we deal with things. But, at the same time, as I said earlier, you’ve got to be authentic. You have to take the bits that you think you need to improve and learn from, and implement them in your own way. If you’re not authentic, people won’t follow you.
Danny Waters
TC: It’s key to know the situation you're in, and what style is most appropriate for that situation. If you know what result you want to get out of that situation, you then have to think about the journey of getting from A to B, and what’s the most appropriate way of doing that. Sometimes, it’ll be closer to what Danny would do, rather than how I would handle it whereas, at other times, it’ll be different. It depends on the situation but also on who you’re talking to, as different people react to different things.
DW: That is a very valid point. We're all working with slightly different generations here. I'm dealing with people who are older than me, so that's one method of communication and style, whereas you guys are dealing with people who are sometimes younger than you, so they respond to different techniques. As a mentor, you’ve got to be able to bridge that age difference to be able get the best out of people.
AD: What would you say being a mentor has taught you about yourself, and how do you feel about the responsibility of shaping other people who are new to the industry?
DW: One of the things that I enjoy most is seeing young people in our organisation succeed. Giving them the opportunity, the tools and the platform to really achieve great things is wholly rewarding for me. As a mentor, I love empowering people to go on and take things to a new level. I'm not the ceiling here—I want these guys to be better than I was in the near future.
TC: I think, for me, being a mentor has taught me to be confident in my ability to teach others. You get lost day to day, and you don't realise how much you know until you've got to try and explain something to someone. It’s allowed me to realise that there are people that do value and want to learn from my own experiences and situations that I've been in before. I am aware that I've learned a lot in the five and a half years I've been there, and I can use that to help people overcome challenges they've not faced before.
GM: I feel the same way as Tom. Also, being a mentor made me realise the importance of building a work culture and getting good people who fit within that culture. Also, it’s taught me the importance of imparting our knowledge and experience to the next generation of people. You always want to have the next generation ready to take over when you're not there—if you are building a business that is solely reliant on yourself, then you're actually not doing a very good job at it. It's all about the next wave, and I always think about that as a mentor.
DW: As a business, we’ve got a huge responsibility and we take that role [as educators] seriously. We get the best talent in the industry and train them, which is arguably much harder and takes longer than hiring somebody who already has that expertise. But by doing this, you get in return loyalty, retention and the cultural alignment that you get from training people. This is something that you have to take seriously.
“As a mentor, I love empowering people to go on and take things to a new level. I'm not the ceiling here—I want these guys to be better than I was in the near future”
AD: What would you say is toughest part of being a mentor?
DW: The toughest part is the responsibility that you've got people who look up to you, and who you need to make sure that you're a positive impact on their life and their career. Also, it's the time commitment that it takes to be a good mentor. Mentoring somebody doesn't happen overnight, so carving out that time to really give people the inner circle is important.
TC: For me, the challenging part is, when you're not feeling 100% or you’re stressed, not letting that get in the way of the job and mentoring responsibility that you have to the rest of the team. As Danny said, you've got to have a positive mindset and be approachable and solution focused with people because, ultimately, they look to you for guidance and help. However, it’s not always easy because you're not in that positive, happy mindset each and every day, and that can be quite tough.
GM: I’d say time is a challenge in terms of making sure you spend enough time with everyone. Also, adapting the way you deal with and teach people. You’ve got to understand what drives them and what may turn them away.
AD: Danny, what one piece of advice would you give other mentors and mentees in the industry?
DW: For mentors, we've covered a lot of it, but the most important thing is to back winners. There's no point investing lots of your time and energy into people—when you’re at my level, I'm talking about—unless they really want to grow and develop. These two are very ambitious people. They wanted to come in and run a division or a business within our group and, one day, they might want to run their own firm. For me to carve out my time, as I was talking about, the mentee needs to be ambitious because if they don't want it, I can't want it for them. Making sure that everybody's objectives are aligned is super important.
“Not everyone takes criticism very well, but an important part is recognising when you've made a mistake and allowing someone to give you that feedback and taking it in a constructive rather than a destructive way”
AD: Finally, Tom and Guy, what advice would you give other mentees?
TC: Be open to feedback. Not everyone takes criticism very well, but an important part to be able to grow is recognising when you've made a mistake and allowing someone to give you that feedback and taking it in a constructive rather than a destructive way. Of course, part of that is how it's delivered, but the other part is recognising that whoever is giving you that constructive criticism probably has your best interests at heart and wants you to succeed. That is not easy to accept in the heat of the moment though.
GM: For me, I’d advise mentees to try to set themselves apart from everyone else—this way, you will get more time from your superiors, and you’ll rise above. It’s important to work harder than everyone else around you, and put yourself in uncomfortable situations. If you’re bright and ambitious enough, you will do well.
TC: It’s also essential to take the initiative, as well. Don't just sit back and wait for people to give things to you, because that's not the way life works. You've got to go out and show you want it and have some initiative—only then your mentor or people in higher positions will start to be a bit more receptive to helping you.
DW: I have a final piece of advice for mentees, and that is to have patience. One of the things that I've seen over the years is that people expect to have a meteoric rise quickly. Part of this journey is trusting those who are giving you the opportunity, and believing them when they say you're not quite ready yet, or that you're on the right path but you need to keep doing this for a bit longer. I've seen so many people make bad decisions, where they've pivoted out of roles because they didn't think progression was coming quick enough, and they’ve regretted it. So be patient, do all the things Tom and Guy mentioned and good things will happen.
Limelight
A glimpse into our ever-busy schedule
1
Who: Spread a Smile
Where: Coram’s Fields, near Great Ormond Street Hospital
What: Helping spread the joy in the little, but big moments of life
2
Who: KSEYE
Where: Aqua Nueva, London
What: The best canapes in the industry at KSEYE’s summer party, for the second year running
3
Who: OSB Group
Where: Wagtail Rooftop, City
What: An exciting launch around the corner and the stress of missing an interconnecting flight
4
Who: Avamore Capital
Where: F1 Arcade
5
Who: Close Brothers
Where: The Llama Inn, Hoxton
What: Talking all things marketing on possibly the hottest day of the year
6
Who: Atelier
Where: The Libertine
What: The challenges in today’s property development market, where the opportunities lie, and a debate on teeth
7
Who: CapitalRise
Where: Tavolino Bar & Kitchen
What: The woes of moving office, and which state in the US is our favourite to travel to
8
Who: MFS
Where: OMA, Borough Market
What: The latest industry gossip, exciting plans for the FP Show, and possibly the hardest venue to find the entrance for 7 5 2
What: Beth showing everyone how virtual racing is done and winning third place in Avamore’s F1 Arcade tournament
Angela Norman
‘We have significant growth ambitions for the next five years’
Just a month after her initial appointment at YBS Commercial Mortgages, Angela Norman has been promoted as the lender’s interim managing director, as part of a wider senior team reshuffle at Yorkshire Building Society. Angela shares how she plans to take the business to new heights, and reflects on the specialist finance’s evolution
Congratulations on your new role! What will you be focusing on in your new role?
My main priority since joining has been to enhance the customer journey, listen to and act on feedback from both brokers and colleagues. This means making changes to how we operate today to create better customer experiences, and ensure we can deliver on our promises to them, as well as fulfil our ambitions as a business. Now that I’ve moved into the role of interim managing director, I will continue accelerating the enhancements we need to make, while also working on the medium- to long-term strategy, which I’m so excited about because it will provide even more opportunities to support our customers and grow the business.
What plans and lending targets does YBS Commercial Mortgages have for 2024 and beyond?
We have significant growth ambitions for the next five years, which include building out the team, enhancing our product range and propositions, and expanding our digital capabilities—so watch this space!
How have the new Consumer Duty rules impacted the specialist finance market?
Consumer Duty has brought a more focused approach for lenders to consider, relating to how they interact with customers and brokers. This includes a sharper focus on the quality of communications, documentation and every part of the journey each customer goes through during the lifecycle of their relationship. For brokers, it has introduced higher standards in terms of their ability to interpret a lender’s risk appetite, target market and value proposition.
Should there be more regulation in the specialist finance market?
I don’t believe more regulation in the specialist finance market will provide better outcomes for borrowers—however, this is predicated on the industry playing a strong role. The NACFB, for example, provides a voice for both brokers and lenders across government and regulatory landscapes, and it’s vital that we work with associations and industry trade bodies to shape key policy changes and ensure borrowers get access to the finance they need.
How much has technology helped raise industry standards and increase the quality of lending in the specialist finance market?
The level of innovation in digital capability in recent years has meant there has been a real shift, with a focus on customer experience and how to deliver this through technology. However, I firmly believe that tech—while fantastic in some respects— cannot replace the human touch. For us, our experienced people are essential to support the customer throughout their application journey, and the complexities within commercial finance mean that this is not always a straightforward process—thus, humans are needed to solve issues that might arise.
If you could change one thing about the specialist finance sector, what would it be?
In an ideal world, I would like there to be more collaboration across lenders, brokers and the sector in general to improve things and make enhancements, leading to better outcomes for all our customers.
How did you spend your very first pay cheque?
I saved a large portion of it into Lloyds Bank’s share save scheme, but I also used some of the money towards purchasing an old G Reg Ford Fiesta!
Do you have any hidden talents?
I’m partial to a bit of karaoke—although whether it’s a talent or not, I’ll let you be the judge, should you ever hear me on a night out!
What is your favourite holiday destination?
Pre-children, my husband and I did a lot of road trips around Italy and America, but the kinds of holidays we do nowadays with the kids are much less ambitious!
What’s your favourite way to unwind after a hectic day?
I like nothing better than doing something outdoorsy and active with my husband and two boys, often followed by a glass of wine!
What is the most adventurous thing you’ve ever done?
Get a tattoo—I’m not typically a thrill seeker, so this was a very ambitious thing for me!
