John Cupis has made an interesting career move. He left Sesame Bankhall Group, where he was managing director, mortgages, just as the network was pulling out of wealth to focus solely on mortgages, and joined Openwork, the all-services network, to look after its mortgages division.
He is now managing director, mortgages and protection, and, despite the troubles networks – especially Sesame Bankhall – have had, believes having an all-singing, all-dancing network is the way forward.
He said: “Following pension freedoms, you can see the growth and development of advice being more complex as people approach their retirement, so a business that can advise on both can be very attractive.
“We’ve seen demand for advice on equity release and into-retirement mortgages grow in the past six months. The equity release market is a little under £2bn in a market that’s £200bn, but it’s fundamentally on the growth track. We can see the FCA giving the green light for lenders to increase their ability to offer retirement mortgages.
“I think businesses that can offer both mortgages and wealth within the same network have a very strong opportunity to take advantage of customers who will need that advice in both camps.”
Mr Cupis has made a career out of mortgage distribution. Before joining Sesame, he ran the L&G mortgage network, an entity that evolved out of the L&G Mortgage Club following mortgage regulation in 2004.
I think businesses that can offer both mortgages and wealth within the same network have a very strong opportunityHe has also sidestepped some of the big challenges networks have suffered from legacy advice over the past few decades.
Of the Sesame Bankhall fines, which saw the network fined more than £7m over two years from the FCA, and then witnessing the network divest itself of its wealth and pensions permissions, he said: “I wasn’t involved at the time. It was an area that was not something that touched me in mortgages and protection.
“The focus of any business that has got legacy issues is always to ensure that it takes the right decision in the future based on what’s happened in the past.
“The mortgage, protection and GI business of SBG is a successful business, and it works in both the network and directly authorised space, and has a significant scale and reach. It will be interesting to see what Aviva does with it.”
Mr Cupis did not see any forthcoming issues with Openwork. He said: “Openwork has been going for 10 years and it was set up on a restricted basis to reflect the fact that if you have more control over your customer proposition and products you provide, you will have a much better chance of managing your overall distribution risk.”
He acknowledged the work that trade associations have done on campaigning for the long-stop, something that could mitigate long-term risk. One aspect, he said, that is particular to the mortgage market, “is that mortgages are renewed on a more regular basis. The long-term risk is less likely because borrowers move home or refinance more regularly and the advice is refreshed more regularly.”
The risks on the mortgage front could be more likely related to market risk, some might think, with risks of a recession or potential house price falls following Brexit. But Mr Cupis did not see a problem.
He said: “The short-term impacts have been more about ensuring financial stability and ensuring customers who want credit can still get it. [Bank of England governor] Mark Carney has been very positive about the credit environment for people in those situations.
“Lenders are starting to reduce their fixed rates. Swap rates are a good indicator for interest rates to follow and at the moment they’re falling.
“Customers are going to see some of the lowest mortgage rates available, whether you’re refinancing existing mortgages or looking to buy a house, provided you’re confident of being able to pay the loan rates.”
The other challenge is the potential of a recession. He said: “Every recession is always different and produces different outcomes. We’ve just decided to change our relationship with Europe and while the currency markets have reacted quite strongly, it hasn’t been quite as impactful on customers buying mortgages day-to-day.”
House prices, however, are “the million dollar question”.
He said: “Property in the UK is a market like any other market and is a function of supply and demand. But it’s not a consistent picture. Some customers that may have exposure to employment in financial markets may be thinking about their position.
“But the main problem in the UK is there’s a lack of supply or customers putting their house on the market for sale. We live on an island with restrictive planning and not enough housing; housing supply is relatively fixed and in that environment of fixed supply it’s quite hard to see prices tumbling.
“If there were a recession, if you look at what happened in the past two recessions, distribution businesses have been incredibly resilient and their track record has been strong. The nature of intermediary businesses is that they’re very flexible; they work hours that suit when customers want to see them.
“Advisers are doing a great job for customers when they need it and that’s always been the case.”
Melanie Tringham is features editor for Financial Adviser
John Cupis’s career highlights
February 2016 – present: Managing director, mortgages and protection, Openwork
2009 – 2016: Managing director, mortgages, Sesame Bankhall Group
2007 – 2009: Managing director, mortgages & GI, Sesame
2001 – 2007: Mortgage propositions director, Legal & General
1999 – 2001: Sales & marketing director, Legal & General Bank
1994 – 1999: Mortgage marketing manager, NatWest
