April 2019
As you should now be aware, FIBA is committed to taking as many of the events it hosts out to the regions to allow Members to benefit from meeting and networking with a variety of lenders, and engage in discussion and exchange of ideas.
April saw the first northern FIBA Industry Forum event which was kindly hosted by Assetz Capital at their offices near Manchester Airport.
The Industry Forum events are unique in that they bring together those involved in the Specialist Finance Industry together in a forum that provides a voice for both brokers and lenders, allowing each to see the sector from their own unique perspective.
For the first event of its type in the region, there was a strong turnout of both brokers and lenders despite the lure of Aintree, and the mix was such that good constructive conversation was had in relation to a number of topics.
Sector Standards - Loan application requirements
Key points of discussion. In essence until there is a strict code that all lenders insist brokers adhere to across the sector, there will always be brokers who work at providing the right level information and others that simply pass on the bare minimum. The conversation between both sides was supportive with consideration given to standards, education and even fee payment dependent upon the level of work the broker had undertaken.
All agreed that there was a need for transparency and that if the sector took up three words as a cornerstone in this area, they should be education, collaboration and communication.
Chairman, Adam Tyler agreed to take some of the key points further, adding that it was the association’s role to educate both new brokers and new lenders which might engender cross sector change.
Client/solicitor issues – what is the effect on business?
Key points of discussion. Both brokers and lenders were quick to agree that there were unnecessary delays caused by solicitors being brought in who didn’t possess the required level of experience and therefore all parties were then paying for their education. Speed is often essential to a client when looking for finance and the construction of FIBA’s Professional Panel was a significant step forward in providing the level of support required.
Discussion ensued in respect of the way in which that a 3rd party legal provider would be introduced to the client and all agreed that from the perspective on ‘an introduction’ the choice should reside with the clients to keep both parties away from a grey area.
Dual Representation in the Commercial Finance Industry
Key points of discussion. It was agreed that dual-representation was something that would become much stronger, however all parties around the table could see the pitfalls clearly. The point at which most agreed was if this was applicable to the niche space, but then this flew in the face of independent legal advice. Many agreed that the use of a Chinese wall might work but many were still sceptical.
Commercial Finance Industry in 2019
Key points of discussion. Does the demise of some lenders recently have lessons for the industry? All agreed that the last 12 months had seen change and that it was very much a different environment now.
Is increased competition good for the industry? Without a doubt – yes. Many firms appear to be in the business for the longer term now looking to balance out the peaks and troughs. Underwriting is now much more careful than in previous times and a broker that is keen to know their client will always present a good case and this increases the level of security for all parties.
Political situations aside, a changed market means that there is more private funding available and should there be issues with funding in the future, that spread and the fact that the funding comes from different areas other than the banks and traditional institutions, will add strength to the industry as a whole. Private funding will always react differently in times of hardship and there would be a more considered approach. There was pre 08 funding, post 08 funding and now there is a much newer, more vibrant type of funding, which can only be good for the industry.
Charges
Key points of discussion.
What was the room’s feelings about upfront fees? Brokers debated the fact that it obviously had its place, and yet overwhelmingly the majority of those represented on the day would not elect to start implementing this as they felt that it was up to them to make it clear to the clients what the situation was and that every now and again a deal will fall through.
Upfront fees for majority the brokers in the room gave out the wrong impressions - although others said that it might be something they would consider in the future, if circumstances demanded it – whilst a few were happy to just take the fee from the lender as the deal closed.
The level of potential applicable fees was not even broached.
Such was the discussion that time beat the clock and the final topic of education, which had formed part of the first discussion point, was agreed to be held over for the next North of England event for FIBA.
If you were not able to attend on the day, there will be others in your area. To view the full FIBA event programme click here