The changing landscape of the broker market
Andrew Bullard, Head of Business at Cashflow UK gives the low-down on the changing landscape of the broker market.
With the recovery of the economy still likely to be a year or two away, it’s more important than ever for brokers to adapt to the changing landscape of the marketplace, to be in a position to offer more to clients in order to win their business.
There is no doubt that the last couple of years have been difficult for the broker community in general. We have seen that in the areas of asset finance and commercial property finance it has been more challenging because of the removal of lenders and the removal of lending through the broker community. To a certain extent invoice finance has not been hit in quite the same way because of the number of lenders in the market still willing to lend.
However, in the past 12 to 18 months a new breed of small to medium-sized businesses have started up who have no preconceptions about the market, but may lack the knowledge about the finance solutions available to them.
One of the biggest changes over the last couple of years has been how the broker community has changed in terms of where the deals are coming from. Intermediaries are dipping into more areas of the market and becoming much more general in their approach. Brokers who were previously dealing with just asset finance for example, are now looking at commercial property finance and vice versa. Mainly this is a clue to a lot of brokers realising they are not able to get the levels of business they need to make a living if they remain in specialist areas.
Being able to adapt or form alliances with partner intermediaries such as Cashflow UK allow you to provide more to your clients and is increasingly important, as clients want solutions to more than one problem, and they will look to you to deliver those solutions. What we have seen is that there are some intermediaries who continue to offer a narrow breadth of services which means they are limiting their growth potential, compared to those intermediaries who can provide a wider offering.
In terms of the future there is widespread feeling that the economy is still a couple of years away from recovery and as the fortunes of the broker community are so intertwined with the success of business in the UK, there will continue to be a lot of caution and uncertainty.
But at the same time, we have to recognise that the picture has certainly improved on two years ago. Brokers may not be seeing the same volume of business or levels commissions they were enjoying four years ago, but it is definitely going in the right direction. In order to get there, brokers will need to be more knowledgeable about more products, and adapt to the demands of the new SMEs who could form the new client base of tomorrow.
