Fred Crawley reports from a
lively get together of retail motor finance brokers at the
Frontline Solutions’ Broker Conference.
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A new trade association
could soon be set up to represent brokers in the business of retail
motor finance. The idea was proposed by Richard Hoggart of broker
DSG Financial Services, in his opening address to a broker
conference held last month by software provider Frontline
Solutions.
“This is an industry to be taken
seriously,” Hoggart said, arguing that “formal recognition” for
principled broker businesses would be essential to ensure “a
long-term position in an ever changing market”.
Hoggart said recovery for retail
finance brokers, especially those concerned with the drastically
undersupplied non-prime market, would rely on a concerted effort by
brokers to raise the industry’s standards and reputation.
He also said that retail finance
brokers needed more of a political voice, asking the audience who
had taken a stand for their interests in recent discussions over
the consumer credit directive.
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Other delegates and speakers
welcomed Hoggart’s suggestion with enthusiasm, but many expressed
uncertainty as to who would administer and fund a new
association.
Andy Shuter, managing director of
Frontline and organiser of the event, said his company would be
“100% behind” any new body, and would be “prepared to support and
sponsor it”.
Another organisation, which cannot
be named at present, said it was looking into the possibility of
providing a meeting space for the project.
Discussions between interested
parties are due to take place in London next month, with the aim of
putting together a “road map” for broker representation.
For now, many motor finance brokers
feel they have little voice as an industry, with one veteran
introducer saying his industry had been “left in the cold” during
the industry upheaval of 2008-2010.
Hoggart also made the point that
many motor finance brokers felt frustrated at being confused with
businesses selling contract hire and leasing products.
Currently, there is no trade body
specifically for motor finance brokers.
While the National Association of
Commercial Finance Brokers (NACFB) includes retail finance brokers
among its members, it is primarily an organisation for providers of
finance to businesses. As such, consumer retail finance is not a
major focus for the association.
NACFB associate director Nikki Cann
said the association would be very happy to work with and assist an
industry body representing retail finance brokers and added that
the NACFB was “hugely supportive of any initiatives which both
supported brokers and protected the customer”.
Meanwhile, Hoggart said that key
allies for a new trade body would be the Finance & Leasing
Association (FLA), many of whose members use POS brokers for a
significant slice of business, and the Consumer Credit Trade
Association.
In the case of the FLA, Hoggart
said that brokers “need a voice when operational policy decisions
are being made”,
FLA head of motor finance Paul
Harrison responded: “Brokers are a very important route to market
for some of our motor members, particularly non-prime finance.
“The FLA already works very closely
with other associated industry bodies and would be keen to engage
with any new retail broker association where we have shared
interests.”
Funders’
reaction
Aside from brokers, many of
the funders present at the Frontline event were keen to see the
establishment of a new representative body.
Shamus Hodgson, head of commercial
development at non-prime funder Duncton, said his company was
behind the move.
“As a funder that is committed to
the broker model, we would welcome a trade association for vehicle
finance brokers,” Hodgson said.
He added that the possibility of
member accreditation was particularly attractive to funders in the
sector. It would ensure brokers were up to speed with latest best
practice, regulatory and legislative concerns.
“It would give funders and dealers
a stamp of approval that brokers had met certain standards.”
Hodgson said.
“As a funder, we would be much more
likely to offer a facility to a broker who had accreditation from
such an organisation than to one who did not.”
Andrew Currie, head of the motor
finance arm of broker-led asset finance company Private &
Commercial Finance, was also excited by the possibility of
accreditation, but maintained that funders would still wish to
maintain choice over which brokers they chose to work with.
The standard raising necessary to
create a national broker alliance could herald more business
opportunities for its members, too.
One attendee at the conference was
Kevin Johnson, a South African entrepreneur with a stake in Your
F&I (YFI), a new subsidiary of purchasing consultancy Purchase
Direct.
Purchase Direct procures energy and
telecoms services for some 2,300 car dealerships, and YFI aims to
provide outsourced finance and insurance expertise for those
companies too small to have their own specialists.
It is Johnson’s belief that, with
sufficiently tight accreditation, a nationwide broker organisation
could work well as a source of business for YFI.
Broker
networking
Besides discussions of industry
representation, the Frontline conference provided a rare
opportunity for those involved in the non-prime point of sale
market to discuss the business climate, network and socialise.
One broker attending said the
conference had provided the first opportunity for retail finance
brokers to “compare notes in a relaxed environment” since the days
of networking events run by British Credit Trust.
Steve Carroll, head of development
at master broker and DSG Financial Services subsidiary Unity
Facilities, also praised the event, saying it had an “atmosphere of
mutual co-operation”.
Presentations throughout the day
included discussions on the problems afflicting the wholesale
funding climate, and a live video feed from US finance and
insurance expert Alex Cooke.
Cooke reported a surge of interest
in brokered dealer business from several US car finance providers,
provoking considerable optimism from the audience.
The day finished with a formal dinner in aid of children’s
charity Childflight. After an after-dinner speech and memorabilia
auction by football refereeing legend Jeff Winter, £3,200 was
raised.
See also: What they
said – delegates discuss the Frontline Broker
Conference
