Nurturing the next generation of finance brokers
"We were seeing very experienced brokers retiring from the sector with very few plans for succession," says Lee Simms, the sales director at Asset Finance Solutions, as he explains the inspiration behind the company's latest initiative, the Finance Broker Academy. Alejandro Gonzalez reports.
"Many of the brokers who have joined us in the past have spent a good 10 or 15 years with a finance house gathering experience learning their trade," but that way of life is changing, says Simms.
"As a result of budgets being cut over the years, people increasingly working from home and the onset of Covid, the sector is seeing fewer opportunities for new entrants to learn on the job from more experienced people," he says.
His experience is backed-up by the facts.
According to the latest figures from the Finance & Leasing Association, broker-introduced finance witnessed a year-on-year decline of 21% in August and a decline of 5% in September. While these number also reflect the Covid slump, the decline in broker-introduced finance was around the -10% mark towards the end of 2019.
This trend is largely symptomatic of a historic decline in brokers themselves.
Today, there are around 450 firms active in the asset finance space in the UK, of which 350 are specialist asset finance broking firms, according to the UK broker directory compiled by Asset Finance Policy.
Julian Rose, the AFP’s director, who began compiling the directory in 2014, says the listing takes account of brokerage firms (not individual brokers) and excludes firms “operating without websites or individuals acting as agents or appointed representatives of other brokers, but most other firms are included.”
The number of broker firms has dropped from 500 specialist firms six years ago, says Rose, which represents an attrition rate of 25 firms per year.
“To some extent, this is to be expected due to the demographics. Many brokers are former senior regional banking professionals who left the banks 15 to 20 years ago. Inevitably some of these highly experienced professionals have retired,” he says.
Rose has several concerns about falling broker numbers across the UK, including the loss of their face-to-face support and specialist knowledge “that is so lacking elsewhere in the financial services industry,” he says.
This state of affairs, has prompted AFS, a franchise network of brokers, to design a training and mentoring scheme that offers a pathway for younger professionals to join the broker industry, says Simms.
"Would-be-brokers came to us asking 'where can we get the experience?', and up till now, we've not been able to answer this adequately.
"So we set out by asking ourselves and our funder partners 'what does a good broker look like?' and in trying to answer this question we created the academy," says Simms.
Whereas the Diploma in Asset Finance, offered through the London Institute of Banking & Finance (LIBF), is more theory-based, the Academy proposes to offer a hands-on approach to the ins and outs of being a broker, says Simms.
The year-long course will enable students to experience all aspects of the ‘broker world’ through formal training interventions in the classroom, e-learning, on the job experience and secondments to funders.
The Academy is sponsored by funders, including Aldermore Bank, BNP Paribas Leasing Solutions, Haydock Finance, Hitachi Business Capital, Shawbrook Bank and Wesleyan Bank.
If all goes according to plan, AFS hopes to welcome its first cohort of eight to ten trainees in January 2021 at a Blackburn, Lancashire location, but the date and venue will depend largely on the social distancing restrictions of the day.
Applicants interested in the scheme should contact firstname.lastname@example.org