Mortgage advisers are responsible for 45%-50% of mortgage sales. This is hardly surprising, because we already know it. What I find surprising, however, is that everyone accepts this percentage split between introduced and non-introduced mortgage business as a fact of life. I believe this is far from the case, and that market conditions are becoming ideal for a shift in favour of intermediary lending.
The mainstream lenders seem to believe they can afford to ignore public opinion about poor rates and service levels. Recently the Ombudsman ruled in favour of a few individual Nationwide and Halifax borrowers who claimed they were being unfairly treated as existing borrowers by being kept on a higher standard variable rate than the one being offered to entice new borrowers in. These lenders can probably ignore the overall implications of this ruling and refuse to scrap their unfair dual rates because they believe general inertia will prevent their customer base from seeking a better deal elsewhere.
With statutory regulation around the corner and newspapers eager to campaign for downtrodden mortgage borrowers, awareness of the need to shop around for good rates and fair treatment will increase. We will see borrowers being selective, rather than sticking with their existing lender when it comes to changing their mortgage.
This is where advisers could start to push up their share of the market and there need be no upper limit.
Borrowers can consult the ‘mortgage best buy’ table in their newspaper ‘ but these snapshot tables are simplistic and barely scratch the surface of the true diversity of products on offer.
They can use the telephone or internet to shop around, but these are often difficult and frustrating because enquirers are expected to know what they want before they can make a start ‘ and many applicants just want general background information in the first instance.
The truth is that people with a problem, or who need specialist advice on an unfamiliar subject, want to talk to a person who understands their needs and can help them narrow down their choices. This is the one big advantage the intermediary sector possesses, and we could experience real growth if we start marketing ourselves more powerfully in these terms.
Compulsory exams and FSA regulation of advice will see a leaner, fitter intermediary base emerge ‘ why not seize this opportunity to increase your businesses by capitalising on the ‘human touch’?
John Prust is sales and marketing director at SPML