The current market is proving exactly why advice matters – Murphy

For example, if you have followed some of the wider media commentary over the past month, you could easily have come away believing we are somehow on the verge of multiple rate rises and a prolonged return to upward mortgage product pricing pressure.

However, when you actually listen carefully to the language being used by the governor, Andrew Bailey, and other Monetary Policy Committee (MPC) members, the message has remained far more measured than many headlines would suggest. And often quite different to what appears to be the lone hawk on the committee, Huw Pill, is saying and voting for.

Many on the MPC still appear to see its role to act within a longer-term rate-cutting cycle, even if temporary inflationary spikes caused by external pressures – specifically energy prices caused by oil shipping disruption – are creating periods of short-term uncertainty.

Tracker/variable product shift

That distinction matters enormously when it comes to advising borrowers.

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Because what we are now seeing from the advisory market is a very deliberate shift away from traditional short-term fixed rate thinking towards tracker and variable products, particularly those carrying low or no early repayment charges. And frankly, it makes complete sense in the current environment.

Why would large numbers of borrowers willingly lock themselves into a two-year fixed rate today if there remains a realistic possibility that rates could be lower in 12-18 months’ time, especially when many tracker products are already priced competitively against fixed alternatives?

As advisers, we are increasingly treating these products not as long-term arrangements, but as strategic shorter-term solutions designed to position clients more effectively for what may become a more stable and lower-rate market further down the line.

Advisers are helping borrowers avoid unnecessary payment shock

This is where the value of advice becomes crystal clear. Because if many borrowers were left entirely to execution-only journeys or direct to lender retention processes, what would most likely happen? In many cases, they would simply select the easiest available option placed in front of them, which would often mean another short-term fixed rate without any meaningful discussion around market conditions, future flexibility or wider financial needs, ambitions and objectives.

That is not advice. That is product selection. The difference is that advisers are able to assess not just where rates sit today, but where they may realistically head next, alongside the client’s overall affordability position, future plans and appetite for flexibility.

In fact, many borrowers currently coming off previous fixed rate products are actually seeing lower monthly payments by moving onto tracker options, which completely changes the normal narrative surrounding refinancing and payment shock. That’s because without professional guidance, many of those same borrowers would almost certainly be moving straight onto higher monthly payments unnecessarily.

Instead, advisers can help clients take a more considered and strategic approach by positioning them sensibly for the next phase of the rate cycle, rather than simply reacting to short-term market noise.

Execution-only processes cannot cope with markets like this

There is also a much wider point here about the ongoing push in certain quarters towards increasingly simplified execution-only mortgage journeys. The last few months alone have demonstrated exactly why mortgage advice should never be viewed as a transactional commodity.

We have seen rapid repricing exercises, product withdrawals, affordability changes, geopolitical volatility and daily market swings, which even experienced professionals have had to work hard to keep pace with. Expecting consumers to properly interpret all of that themselves and consistently arrive at the right outcome feels increasingly unrealistic.

Indeed, many lenders themselves have relied heavily on intermediary expertise throughout this period in order to continue writing sensible business and maintaining borrower confidence.

This market has not rewarded simplistic thinking or automated decision-making. It has rewarded strategic thinking, flexibility, and properly advised outcomes.

Which is precisely why the current environment has once again highlighted the central role advisers continue to play in helping borrowers make informed decisions at a time when uncertainty and opportunity exist in equal measure.

To my mind, it would make sense for our policymakers and regulators to take this period – and many others like it – as a ‘show and tell’ for the positive outcomes advice actually delivers instead of seemingly trying to diminish its value in order to help certain institutions cut costs and boost their bottom line. That would be the real Consumer Duty.