With the market in such a state of flux, there’s no question brokers shouldn’t rely on traditional mortgage and protection advice alone.
That’s especially true for those self-employed brokers, working hard to build their own businesses.
This was a key message at our recent Lender Fayre in Birmingham, encouraging those in our self-employed division to explore every opportunity available to increase their income.
Expanding licence options should be a no-brainer for any ambitious adviser, allowing them to not only increase their skill set and win new business, but deliver a real competitive advantage in their region.
Business Protection
A clear example is safeguarding businesses should the worse happen. If there’s one thing both individuals and business owners have learnt from the pandemic, it’s the value of protection.
For those running businesses, the loss of a key employee or shareholder can have massive implications on productivity, revenue and available cashflow.
But despite the lived experience and clear business case, there are still those that say, “it won’t happen to me”. Research by Mastercard found that the number of micro and small businesses in the UK grew to 1.4 million in 2022 – up 31,000 on the previous year.
While agile and nimble, these businesses arguably face the biggest impact should the business owner or a key employee die or is unable to work because they’re critically ill.
It’s highly likely that advisers may find one of these business owners within their existing client bank, or can proactively reach out to decision makers in their area.
Yes, it can be daunting and the approach may be different, but the market is significantly under-served and the financial incentive is worth the added commitment.
Commercial Property
In addition to helping clients protect their businesses, there’s also the opportunity to help them expand it too. Beyond residential mortgages, brokers have the opportunity to advise on business premises such as shops, factory units and warehouses.
Commercial mortgages can typically be divided into two categories: owner-occupier mortgages for those that will be used as trading premises, and commercial investment mortgages for property that is set to be let out.
For those businesses looking to expand in this way, professional advice is absolutely essential to navigate the different options, potential lenders and their criteria.
Equity Release
On the residential side, later-life lending continues to be a growing part of the market with one-third of the UK population now aged 55 or older.
A key area of this market is equity release as older homeowners look to unlock funds from their property to supplement their retirement pot or increasingly, to support younger family members with a deposit for a house of their own.
While the equity release of old may have left some brokers nervous, today’s homeowners are protected by the no negative equity guarantee, meaning borrowers will never owe more than the value of the property. It also means beneficiaries won’t take on any unpaid equity release debt.
There are still clearly risks involved and it may not always be the right option, making solid financial advice from a qualified adviser fundamental to any decision-making process.
Not only does Just Mortgages have the means to support brokers in achieving their equity release qualification, we recently became a member of the Equity Release Council – confirming our approach meets their exacting standards.
Maximising earning potential
While it may be challenging, we have been encouraged by sustained interest among brokers to go self-employed. At Just Mortgages alone, we’ve welcomed 48 new self-employed advisers in Q1 of this year, with the division fast approaching 500 in total.
Helping them realise the potential of running their own business is just one part.
It’s important we have the infrastructure and support package in place to help them make a real success of it.
In addition to ongoing mentoring and compliance support, providing the necessary training to expand licence options is really important to ensure brokers have all the tools at their disposal to maximise their earning potential.
Plans are already in motion to begin our next round of licence training following strong demand at our recent Lender Fayre.
Ben Allkins is head of mortgages and protection at Just Mortgages
