Scotland's broker market has changed beyond recognition over the past five years. While there has been plenty of talk about all the negative factors which have impacted on the sector, such as consolidation and globalisation, the future is looking much brighter, and the number of opportunities on offer for talented individuals is set to rise.
It is wise at this stage to acknowledge that mergers, acquisitions and general globalisation have significantly affected a number of industries worldwide. However, due to the close-knit, yet at the same time geographically spread nature of the broking sector in Scotland, the consequent trends are easier to pinpoint.
The national broker sector has been subjected to the most notable developments, primarily due to the sheer scale of change these firms have experienced. The disappearance of many recognised names from the market during a relatively short period of time was always likely to cause widespread concern.
This was further compounded by the fact that in reality, a number of the nationals had relatively small representation in Scotland – and thus a merger which created huge opportunities in London or the other major cities in England had little initial impact north of the border. The largest two or three nationals existing today, on the other hand, were already major players, and they have simply married together the skills and expertise of their component parts to become truly national – and international – organisations. The geographical downside in Scotland is that there is now a heavy bias towards Glasgow and Edinburgh. The other regions thereby lose the presence of the pre-merged brokers who were key players in their local markets.
There are a number of advantages to be enjoyed by employees of the dominant nationals. The level and diversity of client they specialise in enhances the skills and experience of the broker, and also makes the role more varied. There are opportunities to diversify into specialist risk/client areas and there is access to formalised training programmes that will enhance the individual's skills, ability and future prospects. With larger numbers of staff there will be scope to move through the ranks in terms of supervisory and management positions – and the opportunities and encouragement to do so act as major motivators. The highest level of IT sophistication, in a PC-driven business environment, is also a feature that can enhance skills and improve quality.
Does this mean there are consequently fewer and less exciting opportunities with the remaining national brokers, or smaller still, the independent firms? The answer to this is an emphatic “no”.
These brokers have generally suffered less internal disruption than their significantly larger rivals and thus, during times when service levels from brokers have been questionable, they have simply retained staff, looked after their own clients and often benefited through “leakage” of business from their larger competitors. In Scotland, they have often deliberately retained a presence in areas where the choice of broker has diminished and find themselves in an enhanced rather than a weakened position.
For staff employed by these brokers, the environment is more challenging. In smaller offices, the individual is more involved in new business development and other initiatives where resources are pooled.
A smaller company and office means it is easier for ability to be recognised, and such firms often have ample resources. They are just smaller than a number of their competitors who often focus more on the level of risk they could not, and would not wish to service. A final, but fundamental difference is that the role of broker and account handler generally remain combined, whereas the major players often separate these functions. Retaining responsibility for market contact and negotiation, as a traditional broker, is often a highly desirable feature.
Scotland also has an increasing number of progressive independent firms. There are those in the major towns that have always commanded loyalty from local clients, and have built significant businesses through excellent service. In the current climate, even those in the major cities, are finding that the small to medium business sector is resistant towards global and national firms, and increasingly likely to secure key accounts on the basis of such service. For the employee, again, it is much easier for talent to be recognised and rewarded with easier access to decision makers. The potential for senior/director level opportunities is high and vacancies with these ambitious firms are often valued more than those with household name organisations.
As the dust at last begins to settle in the Scottish broking sector, there will be increasing scope for talent to be rewarded. It is important that the individual continually strives for personal development to gain greater control over their career choices. The size and nature of the Scottish market creates a demand for quality and, now that companies are beginning to look forward, jobseekers will need to do everything to ensure they have the marketable skills to stand out in the increasingly competitive marketplace.
