“People get this perception that brokers rock up with a client, push them through the door of a shipyard, swivel on their heels and walk back out – later saying, ‘can I have my commission, please?’”, explains Will Christie, sales broker at Y.CO.
There are stories of ‘chancers’ and ‘one-hit-wonders’ that have certainly discoloured the brokerage community’s reputation and, on occasion, left a sour taste in the mouths of the industry and its clients. But, for the brokers that are actually adding value at every stage of the process, it doesn’t seem a fair preconception.
“A lot of clients will go to a shipyard directly, thinking it will save them money, but we save our clients a hell of a lot more than our commission’s worth in pricing negotiations and specification (spec) improvements,” he continues. “A shipyard’s original spec is generally for a standard boat, but an experienced broker will negotiate improvements and additional equipment that increases the value and overall quality of the yacht.”
But it’s not just about pricing negotiations and increasing the spec – one of the biggest costs of ownership, if you don’t get it right, is depreciation. While some clients may choose to overlook their broker’s advice, futureproofing for the almost inevitable re-sale at the earliest point can save millions down the line.
“A broker can also bring together the very best team to represent the client. Throughout the initial design and then construction of the yacht, they are there to facilitate the process and make sure the client gets exactly what he was expecting,” he continues.
“I know of a client who chose not to use a broker. He got very excited and went directly to a shipyard at a boat show. He already had a yacht, but he wanted a bigger one. He thought ‘I’m not going to use a broker because I’ve done this before,’ so they gave him the standard build spec which was hundreds of pages long – and quite frankly, anyone who reads these will think that there is surely nothing missing.
“The GA was agreed, the design was agreed, everything was agreed and he thought ‘brilliant, I’ve done really well here.’ At the first meeting, he goes to the shipyard and they lay out the plans for the boat with a white hull and he says, ‘please could you reprint this with a dark blue hull, which is what I want.’ Now a dark blue hull is much harder to paint, as darker colours show all imperfections. You often also need more insulation etc. The spec said he could have either white or off-white, but there were no darker colours on offer.
“That change order alone was more than a broker would have earned on his commission. A broker would have probably negotiated that dark blue hull for free or a minimal amount before the contract was signed, because you hold all the cards at that point. But that’s just one item he missed in a 400-page spec document – and there will have been many more.
"VTCs (variation to the contract) can stack up to millions and millions. Most experienced brokers know the VTCs that usually come up during the construction of a yacht, so ensure that as many of these are already included in the original contract specification. And if there’s one thing I do know, it's that clients do not appreciate the cost of their yacht constantly increasing during the construction!"
It’s not a battle between the client’s team and the shipyard, it’s about collaborating in a positive manner to make sure that the end product is the very best it can be. A broker should be there to ensure that this is the case.
There are numerous parties involved in the construction of a superyacht that clients may be tempted to cut out to save money, but as I’ve heard one of my industry colleagues wisely say on many occasions, ‘if you think it’s expensive to hire a professional, wait until you hire an amateur’ – or even worse, no-one at all…!