Depending on how the current situation plays out, product transfers could be the only option for many borrowers in the coming weeks or months.
Yet, we as advisers are being hamstrung by compliance.
At a time when people are at home and using the internet for absolutely everything, they can also go to their lender’s website, add a few basic details, choose a product and everything falls into place for their new mortgage deal.
There may be better products out there but, if the customer is with a high street lender then, there is generally not a great deal of difference.
So why then, where a product transfer is the obvious or right choice, do brokers need to go through the rigmarole of collecting proof of identity, address, three months of bank statements and three months of payslips just to press the same button?
Borrowers end up regretting using a broker
A recent case in point: A client with a £60,000 mortgage looking for a five-year fixed rate to beat that offered by their lender.
However, their lender sourced top for rate, top for monthly payment and third for true cost – lagging behind the top spot by only £150 over the five-year fixed rate period.
And that’s before you could discuss broker fees, which obviously are out of the window.
Say, out of some loyalty to the broker, the client still wants to use them to transact.
Once they’ve been provided with the list of documents required, how long before they are regretting their decision? We have probably reached this point after completion of a factfind and a basic criteria search.
Clients may start to question entire adviser process
I realise directly authorised and each network’s requirements differ but, until we’re able to simplify the requirements for brokers placing product transfers, then product transfers are going to be an ever-reducing level of broker business while making up a greater portion of the mortgage market.
Surely, it’s better a client confirms their options through a broker and, if a product transfer is the right option, then the simplified requirement process takes effect. If it’s not the correct option, then document and data gathering proceeds as normal.
As brokers it’s our responsibility to make the clients aware of their mortgage options then make the application process as pain-free as possible, or at least on par with the pain caused by going direct to a lender.
Product transfers are currently far more painful when transacted through a broker than going direct. Clients becoming aware of this will start questioning the whole adviser process if we’re not careful.