We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive all cookies on the Business Car website. However, if you would like to, you can change your cookies at any time
The start point for the best source of fleet information |
The broker sector appears to be going through a period of evolution and divergence at the moment and this is leading me to think - is it time for a name change?
From the outside looking in, in recent times I have noticed some interesting and rather intriguing developments in this sector, but those more actively involved than myself might well take the view that this has been going on for years? My own view is that there does seem to be an increased level of divergence within the ranks of fleet brokers operating in the UK marketplace.
To add a little more background to this blog, it is perhaps appropriate to start by dispelling the popular broker stereotypical myth that has unfortunately been around since the 1990s. It attempts to suggest that brokers service SMEs on the cheap, operate out of their bedrooms and worse still, conduct their home business activities dressed only their underwear! On this note, I am pleased and somewhat relieved to say that I have never seen, nor met, a "bedroom" broker during my entire career in the fleet industry!
Let me be clear - the broker industry that I see is far removed from this inaccurate stereotype, is alive and well and is presently thriving in the fleet market. The brokers I've met are 100% professional and manage strong businesses.
They frequently promote local success stories, are in complete growth mode and universally run great books that in all cases would make the BC50 list if they ever decided to take on the added dimension of residual value risk.
Returning to the divergence aspect, the market now seems to be directing itself along two paths, the first of which is demonstrating a broker strategy that is essentially based on price. Brokers in this sector provide a good service, but in the main focus on offering the lowest cost and are less concerned about whether they secure the client solely or part share the client with other brokers (or leasing companies). Their business model is essentially based on traditional broker values and they will in the main provide solutions specifically for the SME segment.
The alternative path is taken by those brokers who express a desire to attract corporate clients on a one-to-one relationship basis, which for all intents and purposes is a sole supply partnership. These brokers will effectively service all the fleet needs of the end user clients and focus on offering a progressive, holistic fleet management experience.
The broker offering is actually in parallel with that of a leasing company solution and will typically include vehicle procurement, SMR, short term hire and accident management services. The only real difference between these brokers and the leasing sector is that the broker has little or no appetite for taking on the vehicle finance or RV risk in their own right, preferring to back these elements off to a leasing company partner. What is fantastic about this new segment is that they not only service the SME sector, they also act as the fleet management provider for the significantly larger blue chip fleets as well.
I have to say, I'm fascinated by the growth in this sector and by the companies who are now actively providing solutions within this fleet managed broker segment. Over the last few weeks, I've had discussions with Board directors of three such companies, all managing fleets over 5000 vehicles and one in particular that would rank in the top 20 leasing companies in the UK if they wrote the finance on their own paper.
With the combination of the BVRLA increasingly highlighting and supporting this important sector, the massive growth in the sector and the flexibility of the broker offerings, I think the leasing companies might need to take heed and watch over their shoulders.
Finally, a closing note to any of the ICFM members who may be reading this blog - when looking for a potential new fleet provider, rather than restrict your research to the top 10/20 leasing companies, why not take a broader, more pragmatic approach and see for yourselves what is available in the marketplace - you might be surprised.!
BusinessCar magazine ©2019
Business Car Magazine © 2020 | Business Car is part of NS Media Group.
