Only 1% of brokers claimed that their main reason for using a specialist bank was down to digital innovations.

Some 26% of brokers thought that speed and trust were the main reasons for using a specialist bank, while 11% felt that cheaper rates were key.

Does the specialist finance industry agree?

“Brokers’ appetite for the service and products offered by specialist banks is reflective of the waves they’ve made in challenging and disrupting the established status quo set by the bigger banks,” said Jon Hall, managing director at Masthaven.

“It’s not all that surprising that these two things stand out as being top of a broker’s must-have list, given the genuinely different product set offered by specialists, coupled with personal service.

“The results also show that brokers are driven much more by securing a good outcome for the customer rather than themselves.”

Simon Welling, director of sales and marketing at Wesleyan Bank, believed that brokers were looking for service and speed of delivery linked to products which met customer needs. 

“However, it’s surprising that just 3% regard ‘knowledge and advice’ as the main reason they would use a specialist bank as all of these characteristics are closely linked. 

“Primarily, the results demonstrate that brokers wish to provide the best service experience to their customers, who without the right product and timely funding availability may not proceed with a specific asset investment.”

Dale Jannels, managing director at AToM, agreed with the majority of the results, but disagreed with one point.

“…You don’t necessarily need the best product on the market, but someone who can have a manual assessment of the whole application and structure a product to cater for the client’s requirements.”

Chris Whitney, head of specialist lending at Enness, thought the poll results reflected the current market sentiment.

“Nearly 60% was down to product and service. 

“If you roll into this speed and cheaper rates (which essentially go hand in hand with product and service) that’s nearly 85% of your reasons as to why lenders in this sector are used.” 

 

What superior products do specialist banks offer?

“Intermediaries will immediately hesitate to contact the big banks in the first instance as their enquiry will likely be batted away with an algorithmic, ‘computer-says-no’ response,” claimed John Gunn, executive chairman at SynerGIS Capital.

“Specialist banks can offer a human ear to the issue, so a mutually agreeable deal can be formulated within a timeframe which helps the customer achieve their goal.

“For example, the new licensing rules for houses in multiple occupation (HMOs) are due to come into effect this October.

“Many landlords are already facing difficulties remortgaging [their] BTL portfolios and brokers are working with specialist lenders to solve the problem.”

Simon thought specialist banks could “flex more easily on standard asset debt products”, offering bespoke structures which best matched the asset and timing of payment terms to suppliers.

“An example of this may be as simple as retentions on payments to match agreed customer/supplier payment terms.

“Some can also offer a full range of products, from three months to 25 years, covering short-term cash flow requirements through to assets and technology, in addition to acquisition funding and commercial mortgages.”

 

Should brokers look to specialist banks more?

“Brokers already do often look to specialist banks,” added Jon Maycock, managing director of asset finance at Hampshire Trust Bank.

“However, they could look to challenge us more.

“Brokers have the advantage of being closer to the end customer and, therefore, have a better understanding of customer requirements. 

“We are keen to listen to these insights and act upon them to find new solutions and ultimately improve our service.”

Chris didn’t believe that brokers specifically set out to use a lender within the specialist lending space.

“However, more and more I think brokers will be steered down that path for all the reasons listed in the poll as the more traditional lenders seem to have no incentive to close the gap and, if anything, [are] moving further away from the coal face.”

Hall concluded that brokers should look to specialist banks more, given that the UK was going through significant change.

“We have a growing self-employed demographic, debt is a daily reality for millions of people, [and] households are becoming increasingly intergenerational.

“Specialist banks are answering a need for more nuanced, flexible products that reflect the reality of today’s society and the financial pain points of real people. 

“Brokers working with a specialist for the first time will find that their doors swing open to a much larger number of customers than before. 

“The broad, inclusive scope of the specialist bank’s product suite is a really powerful armoury.”