In a move aimed at consolidating its position as the country's biggest mortgage lender, Irish Permanent is planning to set up a chain of mortgage shops which will be owned and operated by individuals and companies who will act on a tied agency business to exclusively sell Irish Permanent home loans.
These tied agents will be required to invest £25,000 in the mortgage shops, which will operate as quasifranchises for Irish Permanent home loans and associated mortgage protection and buildings protection insurance products. Irish Permanent plans to open its first branded mortgage shops in the Munster area and then, if the concept proves successful, will expand the chain of shops elsewhere in the country.
Irish Permanent currently sells mortgages through its chain of 100 branches, through agents for Irish Life life assurance and pension products, and through Irish Life's 400-strong sales force.
But a spokesman said: "We believe that there are still areas of untapped potential for mortgage business and that's what the mortgage shop concept is aimed at addressing. It gives us the flexibility to increase our brand presence in areas too small to support a branch."
"This is designed to complement our existing distribution network and will not be in competition with our existing sales outlets. All the research we have done suggests that this is a viable distribution system and, if Munster proves to be a success, there are a number of other areas where we will be getting off the ground very quickly."
On the £25,000 capital that owner/operators of the mortgage shops must provide, the spokesman said this is aimed at ensuring that people are fully committed to the mortgage shops they operate for the group.
He added that the mortgage shops would either operate as stand-alone branded outlets carrying the Irish Permanent livery, but owned and operated by people who already have a track record in selling financial services, and also as concession shops in leading auctioneering and estate agents.
He was unable to say how many such mortgage shops are planned, but it is understood that much will depend on the outcome of what is, in effect, a pilot programme in the Munster area.
Irish Permanent has already advertised for potential owner/operators in the Munster area and tells prospective owner/operators that "By owning and operating your own Irish Permanent mortgage shop, we offer you the unique opportunity to build your own business and the potential to realise substantial rewards."
The spokesman did not say whether owner/operators would generate these "substantial rewards" through commissions on mortgages sold or on a fixed fee basis, but its advertisement states that prospective owner/operators should have "the ability to build up contacts and sales within the local market". This suggests that Irish Permanent may be targeting the likes of branch managers of competing mortgage lenders who might relish the prospect of becoming their own boss and generating a higher level of income than the salary they currently receive.
