MYI: What has been your business strategy since the Economic climate changed in 2008?
PS: Having traded for 37 years Norton Finance has experienced two major recessions in the past. We know from this experience that we had to act fast to streamline the Company as it quickly became apparent the market was contracting.
We had already diversified the Company before 2008 in order to reduce the risk of a downturn in any one sector. Our strategy since 2008 has been to expand other areas of the business whilst using our experience and expertise in the Secured Loans sector to weather the storm.
MYI: What has helped you to weather the storm during the credit crunch?
PS: We have a very large Range of Products which we can offer the Customer as well as the core Secured Loans Product. We currently offer a whole of market Secured Loans Range plus our own Lending Products for 1st and 2nd charges, Debt Management & IVA services, Re-mortgage and Purchase Mortgage Products and Life Insurance.
We believe the "in house One Stop Shop" approach to the services we offer allows Customers to choose from a Range of Products therefore maximising the returns we can achieve from each lead and subsequently the income the third party Introducer generates for the introduction.
Our long term experience in finding a home for every loan application and our 1st class processing skills have allowed us to maximise the returns during the difficult years.
MYI: What do you expect the loans market to look like in 2012 and onwards?
PS: With the Bank of England still committed to low base rates & some encouraging economic news, this year we anticipate a slow recovery from the difficulties of the last few years with new lenders coming into the market and lending criteria gradually being improved as competition increases.
We have already seen Link Loans starting to lend and positive changes to lending criteria with other lenders. The Consumer debt levels in the country are still high and we believe whilst this is the case there will always be a strong demand for consolidation loans from the Secured Loan Industry.
MYI: How will responsible lending impact the way you process loans?
PS: We have always looked to treat customers fairly and as a result of this many customers come back to us year after year knowing we will always look for a new product or cheaper rate for them.
We have already made changes to the way we assess the key areas of a Customers ability to repay the loan as well as ensuring when Customers are in financial difficulties we aim to reduce their commitments and make them better off as a result.
We have an experienced Compliance Department that regularly conduct checks to ensure compliance with current regulation.
As an industry we need to ensure that any classifications of unfair lending by the FSA or by the Ombudsman are fair & reasonable, in order to avoid the immense problems that Brokers have experienced with the unfairness of PPI complaints handling by the Ombudsman.
MYI: What are your thoughts about the FSA regulating Consumer Credit Act Loans?
PS: It is at the moment still unclear whether the new coalition government will wish to proceed with this transfer of regulatory powers. Early indications are that the FSA will remain in its current form with the Bank of England providing a supervisory role to ensure stability of the financial system, although this may change in the coming weeks.
If this continues it looks likely second charges will be regulated by the FSA. We welcome this change and the subsequent intervention that the regulator may carry out as long as the regulation is fair & any redress to the Consumer is not retrospective in nature.
MYI: How do you see the working practices of independent Financial Advisors and Mortgage Brokers changing in the future?
PS: Due to the cost of regulation many smaller Intermediaries may decide it is not cost effective to process loan applications themselves. This would be an ideal opportunity for those brokers to pass on their leads to a “Master Broker” where a Secured or Unsecured loan is the most appropriate product.
Most brokers offer a generous income share with intermediaries, and once processing costs have been deducted, this can be an excellent way to provide an additional income stream to supplement their core busuiness.
If the 2nd Charge Industry is regulated by the FSA this may give Mortgage Brokers & IFA's the confidence that they are passing leads to an FSA Regulated Sector.
