Dave's monthly digest - August 20

Good morning all,

Welcome to August’s Monthly Digest!

I thought summer had been and gone back in April when we were all locked down, so it’s been good to have a bit of nice weather over the past couple of weeks. I hope you’ve managed to enjoy this and take some kind of break - despite it probably not being as originally planned.  Time is certainly flying (whether you’re having fun or not!), and the end of August brings us to the 2/3rds mark of 2020. It really doesn’t seem that long since I was writing Happy New Year! We’ve had a lot to contend with in those 8 months, but hopefully we’re coming out of the worst of the restrictions both to our lives and businesses. I will touch upon some signs of recovery as I cover the usual topics.

I’d also like to flag up this month’s Growth Series content here, which, as promised last month, is on the Training & Competency scheme. This is the first part of our helping you to make the most of T&C to grow your business.

The second part will be a guide coming soon with some practical resources to further support you on this. This topic of colleague development also ties in nicely with some exciting learning resources we are making available to you and your teams (starting in September and October). You’ll find more details in the ‘network updates’ section.

Also don't forget that all previous Growth Series blogs are available here.

We’d love to hear what you think of these emails. There are some smiley faces at the bottom of the email you can click on to tell us what you think.

Savings

I will start this month’s savings update with some insight on the savings market from Moneyfacts, then give an update on our plans, and some agency specific data summarising the year so far.

Average savings rates have fallen for the fifth consecutive month, as the impact of the Coronavirus and subsequent base rates have seen averages decline sharply since March. According to Moneyfacts UK Savings Trends Treasury Report data, since March, average savings rates for easy access accounts, notice accounts and their ISA equivalents, as well as one-year fixed ISAs, have halved, while the average rates available on longer-term fixed bonds and ISAs have reduced by at least a third.

More on savings & savings insight 

Easy access accounts, which are popular due to the access to funds they allow savers, have seen the average rate (based on a £5,000 deposit) fall from 0.56% in March to 0.22% on 1 August, while its ISA equivalent has more than halved, from 0.83% to 0.32%. As the UK enters a recession for the first time in 11 years, consumers may be looking to put aside some cash for an emergency fund in response, but will need to act quickly or be left disappointed.

In terms of YBS, you will see from the above that we continue to offer above average rates, and month to-date we’ve seen another strong performance with the overall flows being £62.2m ahead of our latest forecast, with strong fixed rate retention supporting much of the performance.

Looking specifically at agencies in this context, the fixed rate maturities for June retained 88% at the end of the 2 month window. At the time of writing, July maturities are at 88%, and August at 91%, with about 1 week to go in both (we have now reverted to the usual 1 month maturity window).

The mortgage team are exploring whether we can increase the level of lending we’re doing based on market activity. It’s therefore likely we’ll be looking to increase our savings flows (and therefore products/rates) over the next few weeks to meet the increased lending opportunity. By the time you read this we should have a notice product back in the range.

I mentioned in my intro that we are seeing signs of recovery, and just wanted to summarise the year to date in the context of agency savings performance.

After a big dip in April, May & June, the transaction levels for the agency network are not far behind this time last year:

We saw similar trends (i.e. a big drop) in the number of new accounts in these same months, and whilst the situation is improving, it is not recovering as quickly.

This clearly has a knock on effect on the agency balances. The agency network currently holds just over £4.5bn in balances, and the year started well with strong growth in Q1, followed by a drop in Q2 (for well documented reasons) and hopefully now a recovery in Q3:

You may well have seen similar trends in your own balances, so hopefully this reassures you somewhat. 

Despite the global pandemic, subsequent market conditions and severely impacted economy, 60% of agencies have still grown in 2020, and even those that have fallen will not have seen a dramatic impact on their commission income.

With the return to your normal opening hours, the ambition now should be to do all in your power to increase new account openings, which will have the knock on effect on your balances. Your DM will be speaking to you in September about your revised growth plans for 2020, and how you plan to achieve this. 

Mortgages

The mortgage market continues to be fairly buoyant (at pre Covid levels) with the homebuyer market in particular proving to be strong, as zero stamp duty on purchases under £500k continues.  Homebuyers and FTBs accounted for 80% of the market so far in August. Interestingly, Rightmove have stated that the number of sales agreed in July was the most “ever”!

There has also been an unusual shift in the split between Direct and Introduced business with Direct taking a bigger cut than usual at the moment (Introduced actually down 9% in early August).

Lenders continue to play around (coming in and out) in the higher LTV market. Although the total number of products available has been slowly reducing over the past 5 weeks, as lenders continue to try and balance potential for high margins and the operational impact that playing in those higher LTV brackets brings.

More on mortgages and what this means for YBS 

What does all this mean for YBS?

We continue to receive high volumes of calls, which puts pressure on our resource position (while we still have colleagues supporting the collections teams). But business levels are where they need to be and there is a current plan in place to take Direct back into the 90% market from 1^st of September, which has the potential to put more resource pressure on us. However,we are planning and adjusting on a daily basis to try to ensure we can meet demand.

This does not mean that developments are off the table.  We have been piloting a “no paper” mortgage application process, which has been hugely successful, knocking 7 days of the appointment to offer timescale. This is fantastic for customers and colleagues. The plan is to roll this out fully in September. We still have teams spread around sites which makes logistics problematic, but colleagues are engaged and working hard.

What do we need from agency teams?

No different than before… there is a market for mortgages and customers will have needs, so don’t be afraid to have those mortgage conversations and keep raising awareness that we are very much in the market and have someone who can help them.

Network Updates

Did you know you can access adverts and leaflets tailored to your Agency?

Earlier in the year we launched the new agency hub to provide a better experience for our agencies; improved navigation and more tools and information to help you. To access the hub you need to select your agency from the drop down list and enter ybsagencyhub as the password. Under ‘local support’ you’ll find a whole host of information and tools. When you feel the time is right, you can use the downloadable adverts to send to local press or door drops/leaflets with the ability to order print. These are customised with your local agency contact details, and there are many templates to choose from, with images you can pick to suit your local market. Your Development Manager will be happy to talk you through it and answer any questions that you have.

Could this be part of your revised plans for savings growth?

More network updates & news 

Events

In early September, we’ll be going digital with our events, to help protect our members against Fraud and stay safe online. As you know, we’re unable to hold face to face events right now, but we still want to make sure members are getting the support they need during this difficult time.

The video content will be hosted on YouTube and will be accessible through our website. It follows a similar approach to the recent Money Minds videos, which have gone down really well. There will be further colleague comms closer to the time of launch to give more detail on this.

Mindset, Language & Actions

It is important that we ensure that everything that our colleagues think, feel, say and do is in service of themselves and everyone around them. That’s why we have engaged with Mary Gober International Learning (MGI). They are experts in delivering inspiring training that is proven to deliver business results. We are partnering with them to bring your colleagues a unique development opportunity ‘Using Mindset, Language & Actions to provide Real Help For Real Life’.   Through engaging training, MGI will help to unlock talent and deliver exceptional customer experiences, harness the benefits of change, build resilience and foster the highest levels of employee engagement and maximise productivity. Helping people to shine sits at the core of what the training is all about.

This online training is presented in a highly engaging and easy to follow Learning Journey. Short modules of content with video based teaching, interspersed with interactive activities start the learning journey.  The learner then progresses to additional activities that can be implemented in small groups or individually to really bring the learning to life.  Each step in the Learning Journey has been specifically designed to build confidence, increase knowledge and maximise value.  In addition to the online training, there will be launch support for you to engage your people ahead of their starting the training, and help for you to embed and sustain the training over the coming months. Your DM will soon be in touch with more exciting details!

Informal Incentives Scheme

As a Financial Services Institution, YBS are careful to make sure we and all associated 3^rd Parties are compliant with FCA guidelines. Whenever we, or any of our 3^rd parties, such as Agencies, offer financial or non-financial rewards to employees we have to ensure we always have the customers’ best interests at heart and that we are ensuring good customer outcomes.

Informal incentive schemes can be an effective way to make work enjoyable and add a personal touch to how you motivate employees. We want to make sure that people are enjoying themselves when they’re at work and their contribution is being valued, and we need to make sure that we’re compliant and customer-focused.

There’s always a potential risk with incentive schemes that we will directly or inadvertently drive poor customer outcomes. If we have an inappropriate scheme in place then there’s the risk of damaging our members’ trust in us. There’s also the potential risk of both bad publicity, and ultimately fines from the regulator.

As part of our conduct risk management and in alignment with FCA guidance, YBS have an existing Informal Incentives Policy to ensure any incentive scheme is fit for purpose, mitigates customer risk and does not drive inappropriate behaviours and lead to poor customer outcomes. To date we have not issued any guidance for use within the Agency Network, so we have now created a policy specifically for that purpose.

The policy will be made available to you on the Proprietor SharePoint with all other relevant polices, and it will help ensure that any existing schemes meet our regulatory obligations, and also provide guidance if you are creating a scheme in the future. Your DM will discuss this with you in September.

Finally

Social Purpose & Sustainability - Charitable Foundation

The latest Charitable Foundation Donations have been released this month with 8 successful donations attributed to the agency network through colleague and member nominations.

The Community team have been working to improve transparency and efficiency in communicating about quarterly donations. So we have new guidance available on what to do next when you have a successful nomination within your area. The latest results and guidance are here.

It’s great to see funds, largely generated through the Small Change Big Difference scheme, going back to community charities that need our support the most. Let’s keep driving member engagement with the scheme and the benefit it can bring.

More Community Updates 

New Charity Partner

We’re still working through the final stages of our agreements, and once they’re in place we’ll be shouting loud internally about our new charity partner and hoping to launch externally later this year.

YBS as a Responsible Business Survey

Some of you have been contacted to share their views on how they expect YBS as a business to protect the environment, act as a socially responsible business and make a positive contribution to the economy. Alongside agency proprietors, YBS members, branch/office colleagues and key external stakeholders were asked to share their views. You can expect to hear more from the Community Team about the impact of this research in the autumn.

We recently asked those on our Agency Council and a few other proprietors for their views on this Monthly Digest and the combined Growth Series. A big thank you to those who took part.

The findings of the research are here. This feedback is really valuable, as it shows we are heading in the right direction. We’ll also use this to help shape future communications that will be of interest to you.

Communications

This kind of message would normally be shared with your teams but we need your help please to underline the importance.

As documented in the Agency Operations Manual and Minimum Operating Standards, we will need to regularly communicate with you and your agency when something changes or is important. We will do this through training packs delivered during the Closed for Training sessions, the Retail Network Weekly Update, or more urgent information via email, or newsfeed.

Please can you ensure that all of these communications are read and understood by all of your team? Please ensure that your team regularly check the agency inbox, and also that that you have a mechanism in place to ensure those that work part time, have a dual role or have been on holiday/absent pick this up as soon as they return.

I hope you’ve found this month’s update useful and informative. Your feedback is always welcome.

Growth Series Content 

As I explained above, this month’s Growth Series Content is on the Training & Competency scheme and is really worth exploring for the benefits it can bring.

Go to the blog here

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