The regulator has said that it wants to make it easier to assess the relative strengths of an intermediary, which could involve the development of useful metrics such as the concentration of business with particular lenders or specific expertise.
This is sound in principal, but there is a risk that, without full consideration to the spectrum of services offered by different broker firms, any comparison tool could take too narrow an approach to the choices available.
Just as the report acknowledged the limitations of comparison websites and sourcing systems in assessing the intricacies of mortgage lending criteria, it is important not to commoditise the service of mortgage advice.
If we do not recognise at this stage that different clients have different needs and requirements from their mortgage broker, then there is a real danger that it will ultimately result in a detrimental customer outcome.
Highly automated, light touch, fee-free broker services are undoubtedly the right choice for many clients with relatively straightforward circumstances.
But for many more, a mortgage broker provides a genuine service as a problem solver and facilitator. This service can be highly valued by the client, but might be difficult to measure as a simple metric.
If the regulator’s attempt to make choosing a broker more transparent encourages more people to seek unbiased advice when taking on a mortgage, it will undoubtedly be a good thing.
But I hope the system that is developed truly reflects the diverse market we operate in and recognises the differing needs of our clients.
