LSL is on a path for growth and aims to be more outspoken about the work it does, its group managing director for financial services Richard Howells said.
Speaking to Mortgage Solutions, Howells said it was focusing on expansion during what had been an “interesting year” for the firm.
Having been in the role for around nine months, when he first joined Howells asked himself if LSL’s financial services division was “structured for growth” and what areas of the business this might be.
“Is it growth in our number of advisers, growth in our proposition? Is it growth in our profitability? What does it actually mean for us?” Howells said.
“We’ll definitely grow this year, that’s positive,” Howells said, adding that LSL was “undertaking a large-scale reinvestment, particularly around technology”.
He continued: “We previously talked about the fact we intend to launch a brand new broker CRM system, that’s on track and we should be making an announcement before the end of the year.
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“That’s an important milestone for our brokers because they have been waiting for new tech for some time.”
LSL wants to be a firm that delivers when it says it will do something, Howells said, describing this as a marker of success.
“This year has been around restating the [company’s] strategy, creating the environment to reinvest back into the business and making sure we’re structured in a way that we can grow.”
Not standing still
Referring to recent staff changes at LSL’s mortgage network, Primis, Howells said developing a business meant looking at how it was structured and considering new roles.
As an example, Howells said, data could play a bigger role in the market meaning businesses would need to recruit more data scientists.
“Three years ago, there were no data scientists within our business, now we’re thinking ‘how many do we need?’ not ‘should we have one?’.
“Roles and responsibilities change as the business changes. If you as a business don’t continually look at how things are going to change and how we need to change then you’ll get caught by the market,” he said.
Roles change to match the needs of its brokers just like advisers adapt to fit customer needs, Howells said, adding that some people did not want to go on the journey the firm was taking, which was “absolutely fine”.
“It’s a really small industry; there’s no reason for anyone to fall out. Let’s shake hands, I wish you well and we’ll bring somebody in who does want to join us on the journey that we’re on.
“A natural turnover of some roles is welcome, but you want to make sure you have a balance of new people with new skills and ideas, alongside experienced people with knowledge and credibility in the market. That’s the blend we’re creating. Ultimately, that’ll be beneficial to our brokers.”
Howells said LSL still wanted to expand its broker numbers and its investment in technology would aid this.
“Another thing that will help us grow is the fact that we’re very transparent, we want to be a business that’s known for delivering what we say we’re going to and we’re a real business of substance,” he added.
Being part of LSL, Howells could not rule out the possibility of acquisitions, saying there would be organic and inorganic growth across the business.
He said as a big business, LSL had been quite quiet recently, but now the firm wanted to make more noise about what it was doing, re-establish itself in the market and make the most of opportunities for growth.
Growing in a ‘volatile’ mortgage market
In the midst of its aims to grow, LSL had been dealing with a “volatile market”, Howells said.
However, he said the market would pick up, suggesting some of this could come from higher rent prices encouraging first-time buyers into the market.
Howell said: “The combination of an increase in purchase business, on top of what will be a very big year for refinance, I think it’s going to mean brokers will be busy next year.
“This will be good in one way but challenging in another because what we tend to find is when brokers are busy with mortgages, there’s less emphasis on protection and that’s a concern for me.”
When asked if there was enough support for first-time buyers, Howells said it was a “chicken and egg” situation where if lenders started to see more interest from this buyer group, “then we’ll see some innovation in the market to help them”.
He added: “I wonder how many people who have been renting have been getting themselves match-fit for mortgages, building up a deposit and waiting for the right time.”
It was hard to see how the non-professional buy-to-let market would grow, Howells added, saying the environment was fine for portfolio landlords but for anyone entering the sector, “the benefits of doing it now are really hard to prove to yourself”.
Challenges for brokers
He said LSL wanted its investment to help brokers be more productive, saying: “Brokers leave a lot of value on the table”. He cited protection as an example of this, as some felt they did not have time to advise on it.
“It’s not a good outcome for the end customer or the broker because it leaves the door open for a competitor to talk to their client about a product they should be talking about,” Howells said.
He said brokers should consider recruiting protection specialists if they were too busy for this business, something he heard of happening more frequently.
While he felt positive about next year’s market, cracking the protection problem was something LSL would focus on, Howells said.
Speaking about whether technology could be a tool to make brokers more efficient, Howells said it could play a “bigger role” saying there were some tasks which could be done with technology.
However, he said the sector should be cautious that the use of technology did not open the door to negatively impacting the broker’s dominance in the market by making clients more used to a fully digitised process.
Speaking of other factors to consider, Howells said impending regulatory changes would not be a problem for advisers, but the pace at which they were coming in was “pretty intense”.
“We’re a large firm with plenty of resources and we see that it’s quite difficult. For smaller firms who don’t have the support of a network, that can be quite hard to keep up with.”
As an aside, Howells said the sector needed to do more on diversity and inclusion by no longer “pruning” the issue and “getting to the roots” of why things were not changing sooner.
Allyship and calling out bad behaviour was important, Howells said, as was removing barriers that made people feel uncomfortable or like there were no opportunities for them.
