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Broker Barometer 2021

As the pandemic continues to dominate our lives, Close Brothers Business Finance surveyed brokers across the UK on a range of issues, from current trading conditions and business challenges to recruitment.

  • 39% of brokers are confident the economy will quickly return to growth
  • For 40% of brokers, total remote working has become the standard operating model during the pandemic
  • Recruitment was frozen for 45% of brokers, while a further one in five furloughed staff, and 7% were forced to make redundancies.

Macro economy - how would you best describe your business's economic outlook? 

Brokers are, in the main, optimistic about the UK economy, with 39% confident the economy will quickly return to growth; a further 38% are more cautiously optimistic, thinking the worst is behind us, but it will be a slow path to prosperity

These results are in line with the wider UK SME market, with scores of 36% and 35%, respectively.

Business performance – growth ambitions Q2 & Q3

Sentiment about growth among brokers is strong with over half (53%) expecting to grow in 2021 while a further 35% anticipate ‘staying the same’; only 10% think they will contract.

These figures outperform the general SME population, where 38% hope to grow and half to stay the same.

In terms of business priorities for 2021, growth is again the main theme for 57% of brokers and for a quarter it’s to continue to trade at current levels.

Remote working

For 40% of brokers, total remote working has become the standard operating model during the pandemic. The remaining 60% have taken a variety of approaches:

  • Mainly remote with some office-based – 30%
  • 50% remote 50% office-based – 11%
  • Mainly office-based with some remote – 7%
  • Minimal, we’ve remained in the office – 13%

Workforce recruitment and training

Despite the severity of the pandemic on hiring levels, close to a third (29%) of brokers recruited new staff. These are strong numbers - to put this into context, in the three months to January 2021, there was an average of 599k job vacancies in the UK, around 208k fewer compared with the same period in 2019. From the first quarter of 2020, job vacancies fell from 796k to 343k in the second quarter of that year, a huge drop brought about by the pandemic.

Recruitment was frozen for 45% of brokers, while a further one in five furloughed staff, and 7% were forced to make redundancies.

Despite the difficulties of training a remote workforce, 60% of brokers continued to upskill their staff, with a further 16% limiting training to better understanding government schemes.

The remaining respondents were forced to cut their training budget because of financial pressures.

Sector valuations

While many sectors have been hit hard by the pandemic, few have suffered as much as hospitality, with brokers overwhelmingly in agreement.

Four in every five brokers selected ‘hospitality’ when posed the question: ‘which sector do you believe has been hit hardest by decreases in asset valuation?’

Fraud

The expectation from some quarters was for a significant uptick in fraud and financial crime following the launch of the Government loan schemes, but brokers haven’t, for the most part, seen a noticeable increase.

That being said, 30% did see report either a substantial (5%) or modest (25%) increase, but this has, fortunately, had negligible impact on brokers’ business levels.

Future plans

The pandemic has caused many firms to think more long-term, and brokers are positioning themselves to work in partnership with their customers. When asked whether they were thinking about looking into or developing other areas of their business, brokers said they would start planning for future risks that business owners face.

On a more ‘personal’ level, many were also planning for retirement and having a tax efficient plan in place.