What does the mainstream market get wrong for high-value clients?
Yeates draws a clear line between what the high street can offer and what clients in this bracket actually require. The problem, he says, is not always the numbers, it is the inability to have a meaningful conversation.
“The biggest gap is it’s very difficult to have a meaningful conversation when you start to get into the higher value space with the mainstream market,” he said. “The reason for that is because there are too many layers of decision makers or it’s very much system driven. The variables that you can talk to a bank about, you can’t talk to a high street lender about.”
He cited credit as a specific example. Private banks assess credit contextually, while the high street does not. Clients with a minor default, often linked to a telecoms company, can be turned away by automated systems, even when the wider financial picture is strong.
Yeates also noted that high-value clients approaching lenders directly do not always secure the most appropriate structure. Banks running what he described as “mortgage surgeries” – targeted outreach to large professional firms – will often arrange a loan, but it may leave significant capital locked in a property when it could be better deployed elsewhere. “As the entrepreneur, you’ve now got a lot of capital sat in that property and you could probably better deploy that into your business or into something else,” he said.
Flexibility before headline rate
The £4.7 million facility was arranged at 90% of the combined property values on an interest-only basis over 18 months, with no exit penalties. The rate came in at 4.8%, significantly below the tracker alternatives available to the clients at the time, which were around 6.68%. On a facility of that size, the differential produced an annual interest saving of approximately £86,000. The Financial Conduct Authority’s (FCA) mortgage lending statistics illustrate how rarely high-value borrowers are served by standard product structures, underpinning why bespoke arrangements of this kind are increasingly sought after.