The discussion kicked-off by asking for observations about the state of the market and got a typically brusque response from one broker who said: “I blame the media for just being miserable and creating a self-fulfilling prophecy. That’s a big problem.
“Actually, when you dig under the surface, I feel quite confident about what we do. So tell them media sorts in London to sort their act out.”
With a promise to take those sentiments back down the M1, another broker added: “Everybody is doing a lot of remortgaging and product transfers. But purchase-wise it’s quieter than usual.”
Others agreed that things were quiet (perhaps the media sorts had a point?). There were “a lack of properties to sell,” said one broker who warned: “People are saying, ‘I won’t put my house on the market because there’s nothing out there that I like, so I’m going to end up with nothing.’ It’s the kind of stalemate we saw in the last recession.”
Battling robots
The theme of technology was never far from the discussion in how it could be used to support firms and also the risks and threats that came with it.
One adviser said they had recently started using digital marketing, in part because they felt online mortgage services were threatening their business. “We need to let people know we’re here and they need quality advice,” they said.
Another attendee said they felt like they were in a “battle against the robots” and others were similarly concerned about online mortgage applications.
One cited an example of a client refusing to pay the adviser because they could not see what the broker had added to the process of securing a mortgage online.
Attendees believed older clients would feel daunted by the online application and seek advice, however, it was pointed out that a new generation of tech-literate clients would have no such concerns.
They said: “For your 18-, 19-, 20-year-olds, the online application is the easy way. They interact with their phones, their iPads and what have you.”
Mind you, there aren’t many 20-year-olds who can raise a deposit at the moment.
But if parents were gifting deposits, they would want their children to get good advice, as one broker explained: “The parents will tell their kids: ‘I’m not giving you 20 per cent if you’re just going to do it online; this is a mortgage, it’s not just car insurance you’ve applied for.”
Another attendee noted: “Get to know your clients’ children. Look at the whole family’s lifetime worth.”
Meanwhile, one adviser said open banking could make their work easier: “It could give us more time for advising clients. But we’re reliant on the tech companies and networks to drive that because we’ve not got the capacity, nor the time, nor the funding, to develop our own systems and software.”
Product transfers
The consensus about the boom in product transfers was that advisers need to be quick off the mark to prevent lenders from cutting in.
“Be in touch with your client to make sure that they don’t look elsewhere,” said one attendee.
Dual pricing was a danger, with one broker calling for regulatory intervention: “The Financial Conduct Authority (FCA) should be saying to the lender: ‘You can’t be doing that, you can’t be giving dual pricing.’”
There was concern and confusion about the FCA’s recent Mortgage Market Study, which indicated that the regulator was leaning towards supporting execution-only. For one broker, it meant brokers needed to be even more proactive and keep their clients close.
“At the beginning of the year when their product transfer comes up, you need to tell your client why they should use you as an adviser and not go direct,” they said.
Next generation
Conversation turned to the need for new blood in mortgage advice.
“There are not all that many new ones coming through,” said one attendee, continuing: “From the outside it may not look like a great industry to be in, but actually it is a great industry.”
Another agreed and explained they had two trainees in the business, in part because there were few opportunities elsewhere.
“People don’t want to take them on because there’s not many firms that are big enough or have got the capacity,” said the adviser, before adding: “We need to ask how can we bring young people in, because there’s plenty that do not want to go to university and this is a great job.”
Another adviser said they had worked with young people who had a dazzling command of digital technology, and so the conversation circled back round to the ways this could be used by brokers.
“That’s where this open banking might not be such a problem,” said an optimistic broker, “because if you can get young people in to be brokers, they’re on the same wavelength as young clients.”
Attendees:
Mark Fenton, Fenton Simpson
Julie Gilbert, 1st Mortgage Services
Amanda McDonald, Preston Baker
Angela Morton, Angela Morton
Chris Simpson, Fenton Simpson
Mike Storey, Reach 4 Solutions
Alison Sturgess, Property Link
Phil Terry, Square Financial
Chris Tudor, Tudor Financial Consultants
Platform:
Lisa Seaton
David Winter
Brad Rhodes
Mortgage Solutions:
Katy Bryant
Danielle Dennis
Owain Thomas
