FTAdviser.com

Advertising

CV: Peter Brodnicki started his career at John Charcol in the late 1980s. Between 1991 and 1995 Mr Brodnicki worked as a sales director for Albany Life where he became an adviser, achieving Top Adviser status for three consecutive years. Between 1995 and 2000 Mr Brodnicki held the positions of recruitment director and head of the estate agency network for Legal & General. In 2000 he joined Mortgage Advice Bureau as chief executive and was tasked with taking the franchise concept from a regional pilot of nine firms, 17 branches and 12 advisers to a national network. As chief executive and a major shareholder, he is responsible for company strategy and expansion.

Mortgage Adviser: How did you move into your current role?

Peter Brodinicki: I moved into it in 2000. I was at Legal & General at the time and from there I met the guys who ran Mortgage Advice Bureau, which was then a Derby-based business. They owned a mortgage shop and a chain of estate agents, and they wanted to expand their proposition so I helped them develop a franchise, a financial services and national proposition. I worked on the Legal & General side to help them pilot it and then joined them as chief executive of the new company to take it nationally.

MA: What were you tasked with doing when you moved into the role?

PB: I started in a pilot role when I was still on the Legal & General side. When I came in I became a major shareholder in the business with the two co-founders of the Derby business and it was essentially my business to take our estate agency-based financial services operation across the UK and build a national operation, which is really what we have been doing. It probably took 12 to 18 months to segregate it from the business in Derby and get the structure right and then the last six years or so we have sort of been building it in pretty much a niche market, which up to this point has been the estate agency sector but it is about to broaden.

MA: What have you achieved at Mortgage Advice Bureau?

PB: What we have done is gone in to help estate agents run their own financial services and help them set up their own mortgage broker business. Some of them opened up mortgage shops and now we are working with close to 500 estate agents around the UK, although I have to say the branch numbers are dropping. So we are helping them grow as independent mortgage brokers and as business that are not just working off the estate agency. In due course they obviously operate as a mortgage broker, so their own estate agency is a customer of their own mortgage brokerage. Also at the beginning of the year we had 250 advisers, which has obviously dropped back a little bit now, which has directly affected an estate agency. We did about £4bn of lending last year.

MA: Mortgage Advice Bureau has dramatically expanded in the last couple of years. Will this no longer continue?

PB: We are now moving into other areas on the back of mortgages. Estate agents are obviously suffering somewhat so we are now going to be moving more into the broker market. So where the brokers are now with a network, that is great but they probably need more help now. A network is not going to help them find new lead sources or restructure their business. We could maybe even let them remove some of their overheads. That is what we are there to do. We are there to be the backbone of a business. They can use us to expand or to reduce costs or whatever. We can always take on elements of what they do. We will probably be standing still this year maybe a tiny bit of growth, which is bucking the trend, but then again we should be right back in expansion next year. We will be out there working with brokers because I think brokers need some sort of strong business model, some strong brand behind them and some strong support, which is really what we are there to provide.

MA: How did you find the first half of 2008?

PB: Everybody really, whether estate agents or mortgage brokers, all built in a "we can cope with a 20 to 25 per cent drop in business and justify our costs accordingly" approach. But actually in the second quarter and as that quarter has progressed, a lot of people have found they have been hit worse than that and questioned was what they had done enough? The estate agents certainly were assuming 25 per cent and they are at least 50 per cent down so clearly from our point of view if we are bucking at 50 to 60 per cent down we are still doing well because we are still at the moment predominantly mortgage broking through estate agents. I guess we are probably 20 to 25 per cent down for the year. But we are clearing up some of the rubbish, mostly because we have got rid of some of the poorer advisers. Building up quality back up, we will get back on target again.

MA: What do you think you still have to work on? How have your priorities changed in recent months?

PB: Certainly from our perspective, like any business, you look at yourself and make sure you are as lean and mean as possible. You have got to be ruthlessly efficient in the organisation and that is what we are doing. That is our biggest challenge, because advisers are probably used to being fed, used to strong mortgage leads and volumes and some have not been as reliant on protection due to rising property prices and rising procuration fees, but a lot of advisers historically have lost some of those skills to fully protect a mortgage. If you think about the adviser of today and tomorrow, it is really about getting the skills back of the adviser of about 10 or 15 years ago. We used to have the direct sales forces of insurance companies and those guys were really good at selling protection and other products. That skill set to a large degree has been lost for a lot of people and the industry is not supporting and training them sufficiently enough to adapt. In this market if you do not adapt quickly you could have a problem.

MA: You obviously have quite a close relationship with estate agents, what do you think of the Carsberg review's recommendation to regulate them?

PB:What will happen as a result of this is there will be a lot less estate agents but the quality businesses will survive. They will not have any problem with regulation. The people who are going to come out the other end, both advisers and estate agents, will be stronger and even better. The strong estate agents have nothing to fear. There are some good quality businesses out there at the end of the day. When the market is tough and the going is really difficult it is not much fun for advisers to be hearing about further restrictions, costs and regulation. Likewise with agents, regulation is not really welcome at the moment. They need to survive first. Then you can regulate them. You cannot regulate something that does not exist.

MA: What are you most proud of?

PB: I am most proud of Mortgage Advice Bureau. We have got a strong, focused and good quality business model for this market. Rather than just provide them with a choice of products and a bit of compliance we are there to help advisers and estate agents grow and diversify their business. We put a lot more resource in than many other people and I think that, if anything I am really glad we have got that model because maybe it was not appreciated so much when the going was easy but when the going is tough you need as much help, resource, backing as possible.

MA: What are your predictions for the year ahead?

PB: It will not get noticeably better between now and the end of next year. Maybe until the beginning of 2010. There just will not be enough business and a lot of firms will not be able to survive as many are not financially structured well enough or do not have a strong enough culture to change quickly enough.

MA: Do you think Mortgage Advice Bureau will see losses? You have about 450 branches at the moment?

PB: We cannot control that as estate agents and branches will shut. We deal with broker firms that have nothing to do with estate agents as well. We will see a fall in estate agency-based advisers because clearly we will not be expanding that side of the business in this market and naturally the weaker go and will not be replaced. Our focus is now on lead generation, outside of that it is working the client base, changing the skill sets to make case values worth more and continuing to encourage a fee-based structure. There are some difficult changes for people to make and we have got to be there to support them in making them.

MA: What would you say is the most important thing you have learnt at Mortgage Advice Bureau?

PB: The most important thing is to continually change, evolve and invest in your business. Unless you are evolving and changing and forward thinking and looking at new, better ways of doing things you are not going to be able to differentiate your business model. The biggest thing we have probably done is we do not have to compete with people on commission, which is mostly what people do. We can compete on being the best business partner for somebody and our business model is forward thinking so you must be constantly be ahead of the game, look where the market is going and prepare your model for all eventualities. I am not saying I have done it right and I am not saying I have done it quickly enough, but ultimately I have done it better than most.