The pricing conversation
Shoaib Bux (pictured) is managing director of Arbuthnot Specialist Finance
In specialist finance, we put more effort into keeping the client at the heart of our business than almost any other industry.
The current conversation around transparency of pricing and the structure of a lender’s overall return hasn’t arisen from any external pressure, but rather from the desire to ensure our clients have the best possible experience and want to return to us for their next project.
It’s a debate that Arbuthnot Specialist Finance welcome.
When the Arbuthnot Specialist Finance team sat down and mapped our client journey, be it an introducer or direct client, we had one simple aim – to make sure that client keeps returning.
Service is a huge aspect of the client journey and arguably is even more important than pricing.
At Arbuthnot Latham we have looked after our clients for 186 years and we bring that same heritage and private banking attention to the specialist finance market.
In a competitive market, pricing is the most visible part of a lender’s proposition.
When a client is planning their project, many considerations must be considered.
This includes working out how to fulfil local housing needs, offering a best in class product, making the scheme stand out and calculating what profit can be realised and invested into the next venture.
Naturally, the client will seek the best value loan facility they can source.
We, as finance providers, have a responsibility to ensure the client is able to understand the true overall cost of the facility in as easy a way as possible.
At Arbuthnot Specialist Finance our way of achieving this has been to keep the pricing of our facilities as simple as possible –we charge an arrangement fee, an interest rate and nothing more.
Interest is charged for the days you use the facility with no minimum periods.
There is no headline grabbing initial rate which increases mid-term. There is no exit fee or early repayment fees charged at redemption.
There is just one clearly set out interest rate and an arrangement fee, allowing the client to understand from the start of the relationship exactly what they will have paid at the end.
We believe that default interest or late payment fees does not help “focus the mind”, so we don’t charge these either.
If things do not go to plan with a project and the client is working with us, then we will make a new plan and support the client through those challenges.
We understand that different projects and clients call for different pricing structures, as well as the importance of a clear and transparent approach to pricing.
Direct clients; challenge your lender to explain exactly how their low advertised rate is charged and for how long, and what fees are payable and when.
Introducers; complete cashflows on the offers you have sourced to show the true overall cost of the facility and not just a teaser rate.
It is impressive that the industry is having this conversation without being prompted, purely to challenge ourselves to continue to better serve our clients.
Arbuthnot Specialist Finance are proud to be part of this evolution.