Mortgage Introducer Cover Story: No Payne No Gain
Nigel Payne is back doing what he does best – managing a team, forging partnerships and arranging specialist mortgage deals. So what’s he achieved in his first six months as MD of TFC Homeloans?
In an ordinary shopping street in an ordinary Northern town hides a pretty extraordinary business – a specialist mortgage distributor that turns 25 in 2016.
TFC Homeloans has seen it all – the birth of the buy-to-let sector and the burgeoning sub-prime market, boom and bust, lenders and distributors dropping like flies and the slow and steady path back to sustainable growth.
It definitely isn’t lacking experience, although if you visit the business’s Warrington headquarters there is a certain lack of gravitas about the offices above an estate agency. But don’t be fooled by the unassuming surroundings. TFC Homeloans may not shine quite as brightly as some of its distributor peers, but this is a grounded business, as solid and down to earth as its Northern roots.
And in the last six months it has already seen the green shoots of growth, led by new MD Nigel Payne.
After climbing the corporate career ladder in HBOS, heading up specialist lenders TMB and BM Solutions, and running insurance business Assurant Intermediary, Payne spent the last few years as a consultant, lending his skills and experience to a diverse range of businesses including law firms and distribution companies.
But when the opportunity to take the helm at TFC Homeloans arose, it was a no-brainer.
He explains: “I’d always said that if the right opportunity came along I would happily go back to a full-time job, because I prefer working with a team. But it had to be the right role and I could clearly see both the ambition of the management at TFC and the opportunities ahead of the business.”
“I’ve known Wayne and Andy for over 10 years – in fact they were one of TMB’s key partners. Some may consider it a strange move from lending to distribution but having worked with packagers most of my career I saw an interesting chance to get on the other side of the fence.”
Unlike some industry figures who were disparaging about packagers in the past Payne has always offered a strong voice of support to the sector. “I’ve always seen the place for packagers and although the industry has changed massively in the last few years that need hasn’t gone away – if anything it’s increased.”
Another big draw was TFC’s focus on technology – it’s long been a passion of the founding directors and the business has always been at the forefront of mortgage software.
Payne says: “There is an art to packaging but you still have to process the deals so you need the efficiencies that technology brings. It has to be a fundamental part of any distributor’s service proposition.
“TFC is fortunate to have bespoke state-of-the-art technology. It was built for us and our brokers and I can confidently say it’s unrivalled in the UK. When you consider the the experience and commitment of our people alongside this software, we have a winning combination.”
Making your mark
For those who have been in the industry a while, TFC Homeloans (previously known as The Finance Centre) is a brand synonymous with founders Wayne Smethurst and Andrew Brown. After all they’ve been running the business for a quarter of a century, alongside many long-standing team members. Coming into a set up like that as the new MD must have brought the potential for disputes, especially as the other two directors are still majority shareholders of the business. How did Payne approach this aspect of the new role?
“We’ve tackled it by playing to our strengths. Wayne is undoubtedly one of the best people in the UK when it comes to understanding how to put together very complex bridging and commercial deals. Andrew is a process specialist focussed on the numbers, so he provides the backbone to the business.
“My role is managing director and I lead in terms of strategy, sales and marketing, and compliance. Wayne and Andy made it very clear from day one that they want somebody to run the business and they work for that somebody. They knew they needed someone with corporate experience to take the business forward in a way they hadn’t quite been able to. They are still major shareholders and will be respected but, at the same time, they have a role to play to help us grow and so do I.”
He continues: “It’s not just about the directors, I needed to engage with and inspire the whole team at TFC. They now understand what we doing and are committed to the journey with us. A lot have been very loyal to TFC so we needed to share our plan and explain that this is the roadmap back to better times.”
Long and short game
Having recently completed his first six months with the business Payne has already made some noticeable changes. The lender panels have grown significantly, as has the firm’s broker distribution.
“I’ve put together a business plan so we now know what TFC’s opportunities are and how we’ll prioritise those,” he explains. “But I also needed some quick wins, which meant expanding the panel of lenders we use, particularly in the first charge residential and buy-to-let markets. We had at least a year’s worth of catching up to do in a short space of time.”
He simultaneously wanted to achieve some quick wins on the distribution side. “We are fortunate to have a lot of loyal brokers, the majority of whom are directly authorised. But we didn’t have a great presence with newer brokers as we haven’t been making much noise for the last six years. It has felt almost like a relaunch, but I suppose it’s been more of an introduction to some firms and getting reacquainted with others. Those that hadn’t heard of TFC when I started know who we are now.”
This focus on forging partnerships has been key to Payne’s strategy. For him it’s meant a lot of travelling up and down the country, meeting up with old industry friends, and making new contacts, both on the lending and distribution side. And it’s paid off – in January TFC had just a handful of first-charge lenders on its panel, now there’s more than 10. But he says: “Most importantly the panel serves the needs of our broker base and their clients.”
Having secured his ‘quick wins’ Payne is currently working hard on his next goal – managing the imminent regulatory changes coming in the form of the Mortgage Credit Directive.
He explains: “Part of this year’s planning was to look at how we were going to approach and support brokers in the run up to and through MCD. Like many changes in regulation it has to be viewed as an opportunity rather than a hurdle. One opportunity we clearly saw was that a referral-only route was an option many of the brokers we spoke to were interested in. With our Introducer Appointed Representative service the broker simply introduces the client to us and we take care of the rest, and pay them for that referral.
“There aren’t figures on how many individuals there are who had introduced secured loans under the Consumer Credit regime but are not going to have the appropriate permissions come 21st March next year. It could be thousands. It may not form a core part of their business but we can offer them a route to satisfy the needs of their clients and generate an income.”
Post-MCD Payne will move into the next phase of his strategy and his aims are clear. “I plan to further expand the TFC team, grow the business’s distribution base and ultimately process more cases.
“TFC already has a central London office with two specialists based full-time in the capital and that will be expanded in 2016. London is important to us given the number of brokers we work with there and throughout the South East. All our processing is still done in Cheshire but we need to have a presence where a large proportion of our brokers are based, so we can properly support them.
“Over the next five years we are looking at a market that will show good growth. As a business we are planning to grow organically, but of course if other expansion opportunities present themselves we would look at those as they arise. Nothing would surprise me about this business and this market.”
What about his own experience of being back in gainful employment for the last six months?
“I’m loving it. I know some people prefer to work on their own but I have always enjoyed managing a team. I get excited about the future possibilities with TFC Homeloans and I love being able to really make a difference, which isn’t as easy to achieve when you are consulting.
“The only thing I don’t enjoy is my commute from Leeds to Warrington – travelling around the M62 is a nightmare. However we are looking at potential relocation of TFC Homeloans and new offices. The growth plans we’ve got for the business are significant and they can’t be fulfilled in the current location, although no decisions have been made yet.”
TFC Homeloans under Payne is still down to earth but now it has a bit more Northern swagger about it. He plans sustainable growth that harnesses everything that those loyal to the brand already appreciate – unrivalled experience in specialist distribution and technology at the cutting edge of the market. But he also wants to ensure that the business fulfils its clear potential as a major mortgage distributor, and his experienced team of mortgage professionals exude a quiet confidence that they can achieve it.
The current office may well be easy to miss but Nigel Payne is ready to put TFC Homeloans back on the map.