The case for building recurring value now
Why mortgage income rises and falls with the rate cycle, and why a second, recurring advice income built alongside it grows more the earlier it starts.
Why mortgage income rises and falls with the rate cycle, and why a second, recurring advice income built alongside it grows more the earlier it starts.
A mortgage business earns when deals complete. You control the quality of the work, and the wider market decides how many deals there are to write.
A second, recurring income can be built alongside the mortgage work, and the earlier it starts the longer it has to build. The recurring income comes from wealth advice given by Equity & General; you introduce the client and share in the value that builds.
Mortgage income is earned one deal at a time. A completion pays, the file closes, and the next month’s income has to be won again. A strong year leaves no income in place for the following year, however well the firm is run. Your reputation brings enquiries in, and each one still has to be won, worked and completed before it pays.
The number of deals in front of you rises and falls with things no broker controls:
When these move against you, enquiries fall whatever the quality of your advice, and a mortgage-only firm's earnings follow a cycle it cannot influence.
Product transfers and simple retentions pay less than new lending for a similar amount of work. Lenders also approach borrowers directly at renewal, and comparison sites and execution-only routes take some straightforward cases away from advice. Each of these can reduce the fee, the volume, or both.
When a client is advised on their pensions or investments and stays under ongoing advice, the fees on those assets under management recur year after year, and tend to grow as the assets grow. That income does not depend on next month’s completions. When purchase activity falls, people still have pensions to review, savings sitting idle in cash, and protection gaps behind their borrowing. A base of recurring advice income gives the firm a stream that continues when transactions slow, from the same clients you already serve.
The lang cat’s Advice Gap 2025 report found that 9% of UK adults have paid for financial advice in the last two years. That leaves most UK adults without paid advice on their pensions, savings and protection, and some of them are your clients. You meet them when they take on a large debt, which is when questions about retirement and family protection come up.
Recurring value is slow to start and builds on itself. In the early months the introductions are few and the recurring income is small. As clients are advised and their assets grow, and as more of your completions turn into introductions, the base accumulates and begins to compound. A base that has been building for several years is larger than one started today, because later growth builds on the early years. Each year you wait is a year in which the base is not growing. If you begin now, at whatever pace suits the firm, the early years are behind you by the time the base is larger.
You introduce the client; E&G provides the advisers, the systems, the compliance and the administration; and you share in the recurring value of the assets that result. You keep placing mortgages as you do now, with the same permissions, day-to-day work and client relationships. Over time, recurring value builds alongside the mortgage income and stays attached to your firm.
The change is gradual. The first year is mostly about building the habit of introducing, and the recurring income is modest. Within a few years, as advised assets grow and referrals become routine, the recurring base is large enough to matter to the firm’s income and its stability. This describes what a partnership is built to produce and does not forecast any figure.
The regulated advice is E&G’s. Pensions, investments, tax and estate planning are advised by E&G under its FCA authorisation (No. 474163). You advise on mortgages and protection under your own permissions, and you introduce the client for everything beyond that. Your share of the recurring value is contractual, set out in your partnership terms, and it does not depend on you advising on a single pension or investment. You build this second income within your own permissions.
Recurring value compounds, so the years spent building it are what the later income rests on. Beginning in a quieter period means the base is already growing when activity returns.
It behaves differently from completion income. Fees on assets under management recur each year and do not depend on new lending, so when purchases and remortgages slow the advice income continues from the clients already in place. That gives the firm a stream which is not tied to the transaction cycle.
No. You carry on placing mortgage business as now. The recurring value is added alongside it, from the same clients, through introductions to E&G. It is a second income built on top of the firm you already run.
The work is making an introduction at the right moment, which sits inside conversations you are already having. E&G handles the advice, the paperwork and the ongoing service. You can begin at a low, steady pace and let it build alongside your normal work.
The pension, tax and estate questions portfolio buy-to-let landlords face, the signs you see in their mortgage cases, and how the introduction to E&G works.
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Self-employed borrowers with irregular income: the pension, protection and tax gaps the mortgage paperwork shows you, and how the introduction to E&G works.
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The pension, surplus cash, protection and sale-planning gaps you see when arranging a company director's mortgage, and where your permission stops and ours begins.
Read itYour firm keeps the mortgage and protection advice. Equity & General gives the pension, investment and estate planning advice, and a named partnership manager sets the arrangement up with you.