The Financial Conduct Authority (FCA) estimates that around one-and-a-half million borrowers are up for remortgage this year, with most, I expect, discovering their monthly payments have gone up when they do.
While the market has seen an improvement in rates since the tail end of last year, for some advisers, there will still potentially be difficult conversations with clients that lie ahead.
I expect a lot of borrowers are already aware of their situation before they visit a broker, and this may form a part of their decision-making when it comes to who they choose to visit for advice.
For some of the one-and-a-half million borrowers, it may have been five years since they last visited their broker for advice. If they were happy with their service last time, they will no doubt visit the same broker again. However, if not, or if they simply fancy a change, they will be looking for a new broker.
So what makes a client choose a broker?
If we go back five years to when a borrower was perhaps moving onto their current fixed rate, for some, arguably, rate was king – borrowers knew interest rates were low and, in return, wanted the best deal they could find.
Given that rates were so low, affordability was less of an issue for borrowers than it is today, and this may have swayed them into a different mindset – perhaps leading them to seek advice online.
The market is now in a slightly different place, and I believe borrowers, anticipating potentially challenging conversations, will find that who they confide in becomes more of a personal choice. After all, discussions about finances can be tricky even in the best of times.
Service
I still believe good service is one of the biggest retention tools brokers have at their disposal.
Generally speaking, there can be a tendency to remember really bad and also very good service – which is why I think we often see extremes in online reviews.
Whether it is securing a good rate for a client, responding quickly, or generally being professional and approachable, if a client has received good service, they are likely to tell their friends and family about it as well.
One of the most common questions brokers often ask is ‘How did you hear about us?’ More often than not, the answer is through word of mouth or a personal recommendation. After all, nothing speaks louder than a satisfied client singing your praises to their friends and family.
Convenience
In today’s fast-paced world, where everyone leads busy lives, convenience is key.
Convenience can take on various forms. For some borrowers, this may involve visiting a broker in the evening after work – and among our own members, we have seen this become a growing trend as they look to cater to the varying needs of borrowers. For others, convenience might mean visiting their local brokerage on a Saturday morning on their way into town. Or for others, seeking advice online or through an app while commuting to work will be the preferred method.
Fee vs no fee
For others, their decision on which advice firm to choose may ultimately come down to cost. This can work both ways. If affordability is potentially an issue, while one borrower might view the increase in payments as a need to save money on the advice side, others might recognise that potentially more work will need to go into their application and paying a fee for advice is worth it.
The culture
The culture of a firm is something that has also become increasingly important to clients over the past few years – whether it is aligning with the company’s green ethos, its professionalism, or its overall image. Receiving mortgage advice used to be a formal event – sitting down with the local bank manager and trying your best not to put a foot wrong. Nowadays, clients are increasingly looking for someone they can relate to and who can put them at ease.
The issue of diversity is a growing one in financial services, whether it be an increase in female presence within a firm or a minority ethnic group. March 8 marked International Women’s Day, and we are fortunate at Rosemount to have a number of strong female advisers within our network – our youngest who qualified at just age 18.
There is a diverse range of borrowers looking for mortgage advice, and I think it’s great when firms can reflect this diversity in their own businesses.
What borrowers are not looking for
We’ve talked about what clients are looking for – but what about what they are not looking for?
Some comments recently by broadcaster Paul Lewis quite rightly sparked uproar in the mortgage community when he suggested that to get the best possible deal, a borrower should go to one of the big, national, independent mortgage brokers – “don’t find a mortgage broker over the local cab shop in the high street,” he said.
I think we are increasingly moving away from this image in financial services that bigger is better.
Visiting a large, well-known high-street bank doesn’t guarantee you a better rate or service – and the same is true for brokers and networks.
Paul Day’s quarterly network table serves as a reminder of this. At one time, there was a tendency to look at the table and think that those with the highest numbers were naturally doing better.
I think, increasingly, not just with networks but also with brokers and their clients, it’s not all about size and growth for growth’s sake. At Rosemount, I know we don’t want to forgo our principles and the care and attention we give to each of our adviser firms. We are finding that we are not chasing size, but rather a more personal approach.
