Fixed rates have been at record lows for such a long time that for the majority of clients the fixed rate premium has comfortably been worth paying. After all, it’s not much of a premium if that five-year fixed rate still starts with a one.
In fact, for many clients the only real decision has been precisely how long to fix for.
Sourcing systems have come on incredibly in recent years, meaning brokers have been able to quickly identify a cheap rate from a reliable lender that suits the client’s needs.
However, there is a danger that in some cases brokers have become little more than order takers. Technology has, if anything, made the advice process too easy and for some that’s led to laziness.
The trouble is that this reliance on technology has come unstuck in the aftermath of the market upheaval we have seen over the last month or so.
Those sourcing systems have all too often been unable to keep up with the pace of change, for both products and criteria. What’s more, some lenders have been a little cute, holding back their best products from those sourcing systems when they are initially launched.
It’s not all that different from using a SatNav. It’s a great piece of tech when it works properly, helping you arrive at your destination quickly, but you have to be able to find your way without it. After all, if the SatNav breaks or gives you iffy advice – like directing you into a river, or the wrong way down a one-way street – you can’t just carry on regardless.
Experience counts
The way that things have changed obviously presents a challenge, but it’s one that those of us who have been around for a while and truly understand how to place cases will thrive upon.
Ultimately, a quality mortgage broker does far more than simply point the client towards a cheap rate. It’s only by getting to know the client, understanding what matters to them and their attitude towards risk, that we can really work out what sort of mortgage deal is going to be most appropriate for their circumstances.
For those relatively new to the industry, the last couple of months will likely have been a real shock to the system. While experienced brokers will have been through this sort of upheaval before, and have the muscle memory of what’s required to really provide the best advice, newer brokers or firms heavily reliant upon technology, may not have developed that skillset yet and so have found placing cases more difficult.
In my view, this has made it clear how important it is for brokers to be technicians, to really understand where to look for deals and how to place cases. It’s crucial for brokers to be comfortable working with all sorts of different lenders, not just those most familiar with them. We’ve seen a big increase in the number of cases placed with the smaller building societies, for example.
Seeing the opportunity
For all of the stress and the sleepless nights caused by this market shake-up, ultimately I think it presents the broker community with an opportunity. It’s given us a chance to get back to basics, to reconnect with what great advice actually looks like.
The improvements in mortgage technology have been tremendous, and sourcing systems and the like will continue to play an important role for brokers of all kinds. However, this shock should remind us all that they should be a supplement to the advice process, there to assist us in doing the best job we can, rather than software that effectively does the job for us. Moreover, having the skills to not rely on the technology available, but to know where to find the information you need, is crucial.
Otherwise, you may well endlessly drive yourself into a river.
Mortgage brokers do a vital job, and that job is only likely to become more crucial due to the economic challenges ahead. Yet we can only do that properly if we reconnect with those original skills, and get our hands dirty when going through the numbers, rather than relying on technology to do the hard bits for us.
