BestAdvice fires the questions at Daniel Yeo, CEO at Specialist Finance Centre
BestAdvice (BA): SFC has undergone a lot of growth over the past two years. How have you managed to deal with this demand and what do you attribute it to?
Daniel Yeo (DY): You’re right to say that SFC has grown a lot since 2021; it has been a part of a considered strategy that we established a couple of years ago. We took a pragmatic approach to growth, ensuring we were well resourced in all areas of the business. Our wisest decision was to invest heavily in extra quality control (QC) and compliance support before the business levels increased. There’s nothing worse than having to retrospectively adjust QC and compliance because of increasing business levels, as that’s detrimental to client outcomes.
In addition, we have ensured that the right people are responsible for the right areas of the business; this decision has also been instrumental in allowing the growth to be controlled and well managed. For example, we recently appointed Joe Dillon as Recruitment Director for our self-employed arm, SFC Solo, where he’ll be overseeing the growth strategy.
BA: It’s just over a year ago when you launched SFC Scotland. How is the business doing north of the border and what challenges does the market currently face?
DY: It’s certainly gone well over the past 12 months. Allan Smith, our Director of SFC Scotland, is highly experienced and is building a great team of self-employed advisers. We have also just made our first employed hire. It’s an exciting prospect and we’re delighted to see SFC Scotland starting to take a hold of the B2B market north of the border.
Scotland faces some of the same challenges that England does; namely, meeting housebuilding targets and building the right homes in the right places.
BA: Does the market still need educating about second charge mortgages or do you think the broker community is now fully aware of these products?
DY: While I‘m confident there is more engagement with the product than there has been, old habits die hard; unfortunately I do think there are clients who don’t complete on a second charge where they should have, opting for a less suitable remortgage, for example.
We can only keep flying the flag for second charges and help educate brokers about the benefits they can provide, especially when remortgaging at the present time could lose the client their cheaper fixed rate.
BA: A few bridging lenders had funding issues in 2021; with that in mind, is there enough choice is the bridging market?
DY: There is ample choice, especially on non-regulated bridging. Regulated bridging has a few key players and I don’t see that massively increasing to be honest.
Everyone wants a piece of the non-regulated bridging market and understandably so, but certainty of funding is key and being able to deliver on what you promise. In fact, one could argue there are too many lenders out there with very similar propositions, rather than offering genuine choice.
BA: How do you think the second charge and bridging markets as a whole will fare over the next 12 months?
DY: It’s an exciting prospect for both specialisms. Second charges will no doubt benefit from the huge amount of clients locked into fixed rates that won’t want to leave them for far higher ones and incur ERCs. In addition, debt consolidation via a second charge will continue to be hugely popular and necessary.
On the bridging side, it offers landlords and property investors a rapid way to seize opportunities in the marketplace, especially at a time when the buy-to-let market is more expensive than it was and lenders are tending to be less risk averse. As long as applications are well-thought out and ideally show a couple of exits then they stand a good chance of being accepted by bridging lenders.
BA: Do you have any plans for growth for 2023?
DY: We are looking to increase our SFC Solo self-employed adviser headcount to 30 by end of year. The employed side has two to three academy intakes lined up and we are investing heavily in our Bridging & Commercial department.
I expect us to be close to a headcount of 60 by the end of the year, which would represent significant growth for us.