Q. How has your career to date led to your current position at Scottish Amicable?
From about 1975 to 1989 I worked for FS Assurance ‘ which later became Britannia Life ‘ as a life inspector through to national sales manager. I left in 1989 and took up the position of financial services director within a Scottish estate agency, Slater, Hogg and Howison. They had been purchased by TSB Scotland the year before and wanted someone to move the company further forward. I became the managing director of the firm’s mortgage shops around the UK, but left in 1995 when the new chief executive decided to sell TSB-only products. In August 1996, some business associates at Scottish Amicable were looking for someone to develop a mortgage operation going forward from the late 1990s and into early 2000. Hence the reason I came on board. I looked at their current strategy to help implement Premier Mortgage Service. Since this first idea, it has gone onto become the largest mortgage club in the UK.
Q. As regulation increases, how important will it be for advisers to belong to a mortgage network or club?
Over the last two or three years, self-regulation has definitely cleared out some of the bad behaviour among intermediaries. We have a much more orderly intermediary market going into statutory regulation than if we had gone in there from day one. With CP98 there is more onus on a change upon the lender than the intermediary. In my opinion, the way that the new rules will be issued will be through technology. I can guarantee that unless intermediaries have an approved system with statutory regulation, lenders will not accept business from them. Clubs and networks will not deal with compliance ‘ it has to be trading platforms, controlled by lenders. Regulation is not about forcing one and two-man bands into networks ‘ as long as they have the technology they can remain a player in the market place.
Q. Do you believe there is room for more than one electronic trading platform in the market?
I think at the end of the day, there will probably be two or three. This is only good for competition. I think lenders would also welcome more than one platform as they are having to make decisions to fit in with their competitive position.
Q. As lenders take greater steps to retain customers, is the rate of remortgaging set to decline and where does this leave brokers?
From last year through to the summer of this year, there has been a lot of activity in the remortgage market. Going forward, I think lenders now recognise you cannot keep building massive benefits for new clients without looking at the existing clients. Many lenders have been building up there retention departments to retain new business. I think with interest rates as they are, there is less potential to keep churning out mortgages ‘ if clients will feel they are moving for only a small saving, they will not want to go through with it. If brokers keep selling mortgages, it will force lenders to bring back some sort of penalty to ensure clients remain with them for a longer period of time.
I believe the remortgage market will be active, but not as active as it has been over the past 18 months. Advisers will have to look at other ways ‘ such as benefits on the back of mortgages ‘ to keep getting remuneration from their clients. Clients have never had it so good, but at the end of the day someone has to pay for it.
Q. Aside from regulation, what do you think will be the main issues facing advisers over the next 12 months?
Advisers will need to ensure they have the appropriate qualifications to improve themselves in the eyes of potential clients. Advisers need to be viewed by customers as being a qualified expert in the mortgage market. With the help of technology they can also remain compliant and forge a stronger relationship with clients. The income advisers have enjoyed in the past may well decrease. Sub-prime lenders are becoming more mainstream and vice versa, meaning there is more competition, better pricing for borrowers and in turn less income for the brokers.
Q. Which area of the mortgage market will see the most growth over the coming years?
If you want my tip for a market area that will really develop next year, it is the equity release market. Potentially it is the most exciting area of growth and I think lenders such as Northern Rock are in a marvellous position to ensure they get an even stronger foothold on that sector of the market. I see this as a tremendous growth area.