For instance, I read recently that – according to Moneyfacts – the average shelf life of a UK product is down to 21 days, equal to the lowest ever time recorded.
Which means it’s possible that, in three weeks’ time, every single mortgage product available to you today could have been changed in some way. Now this could be a minor shift or it could mean the product itself being withdrawn completely, but those shifting mortgage sands mean you’ll need to be on top of the marketplace like never before.
More reliance on advisers
Now, clearly, there is a positive in all this.
The vast majority of those product changes are due to the highly competitive nature of the market – lenders have plenty of competition for their product ranges and if they want to secure their business targets then they having to constantly review and respond to what is going on.
The evidence of that is all around us. Take the 60 per cent loan to value (LTV) mainstream rates being offered and how they have edged down week-on-week, and in a product sector like 95 per cent LTV we’ve seen rates falling over the past few months as more lenders enter the market.
All good news for borrowers, and clearly good news for advisers because a market in constant flux makes it difficult for customers to go it alone, secure a mortgage from a lender, and feel like they are getting the most appropriate deal for their needs.
As mentioned, however, it does present challenges for advisers because the perfect product fit with the most competitive rate available last week, may not be the same today. And we know that clients are unlikely to be happy if, in between their being offered a rate, a more competitive offering appears which they are eligible for.
It requires a constant state of vigilance for advisers to ensure they are not going too early for a client or, conversely, leaving it too late and missing out on rates which are likely to be changed or gone forever in three weeks’ time.
Keeping on top of updates
But, how to carry out this constant checking? It’s certainly not possible from a manual perspective so why not use the technology available?
For instance, Dashly operates a system which checks clients’ mortgages against what is available 24/7 and can inform the adviser when a more suitable or cheaper deal becomes available.
This can help ensure the adviser is not continually checking back against the advice they have given and worrying that it is rendered null and void by a highly competitive lending environment.
Advisers themselves will of course be getting regular updates from lenders about their product changes, they’ll be seeing it flagged by their distributors and they’ll also be made aware via their sourcing systems, but this is providing a catch-all, general review.
The above is not tailoring those product shifts to the individual client, which is actually what the adviser needs. However, the technology is now available to do that, and this should mean everyone is up to date.
It’s also a boon for existing clients as well because it can continue to check the market against their existing product and rate and flag up any potential cost savings which may be worth exploring, even when taking into account early repayment charges (ERCs) and the like.
As we’ve seen recently, when you have sub-one per cent five-year fixes coming to market, it may still be more cost-effective to come out of your current deal early and pay the charge, in order to secure these new specific deals.
So, while the competitive nature of the market is a huge positive, it has to be married up with your ability to provide your clients with access to these excellent rates and products.
Let the technology take the strain and you need not worry that either you or your client are missing out.