Does AI really think it can replace mortgage advisers? – Jannels

Likely depending on whether I’d had a drink or not.

It has certainly taken over from Google when it comes to satisfying my inquisitive nature and answering everyday questions about finances, unfamiliar topics, exercise regimes, holiday planning, gift ideas, DIY guidance, medical conditions (unrelated to DIY guidance), and just about everything else in between.

There’s also no getting away from the fact that artificial intelligence (AI) is reshaping the mortgage sector at pace, changing the way lenders and brokers manage applications, assess risk, support customers and meet regulatory requirements. Its growing role is helping a variety of firms to operate with greater efficiently, make better-informed decisions and improve the overall customer experience. However, despite the clear benefits, many organisations are still working through the practical challenges of adoption and how best to use this type of ever-evolving technology within their businesses.

But what does AI think about its role in replacing mortgage advisers in the UK? That was the very question I asked it, because I was intrigued to see its response. And here is what it came up with: “No, not in full. AI will take over parts of the job, but it is unlikely to replace good mortgage advisers.

“The most likely outcome is that AI will become a powerful tool for advisers. It will speed up fact finds, criteria checks, case notes, document reviews, rate alerts, basic client queries and administration. It may also take more straightforward cases into digital or execution-only routes.

Sponsored

Aldermore Insights with Jon Cooper: Edition 9 – Why lending strategy is becoming more central in buy to let

Sponsored by Aldermore

“But mortgage advice is not just product search. It involves judgement, suitability, risk, affordability, protection gaps, family goals, credit issues, self-employed income, later life cases, buy-to-let tax considerations and customer support. That is where human advisers still matter.”

Why human advice still has a strong future

It continued with: “The Financial Conduct Authority’s (FCA’s) mortgage advice rules still place responsibility firmly on the firm. Where advice is given, firms must take reasonable steps to ensure a mortgage is suitable for the customer. Suitability must be based on the customer’s needs, circumstances and relevant facts.

“AI does not remove that responsibility. The FCA has indicated that it does not currently plan to introduce AI-specific regulation, instead relying on existing frameworks such as Consumer Duty and senior managers’ accountability.

“There is also a clear distinction between advised and execution-only business. FCA rules state that if an interaction includes advice or a recommendation, the sale cannot be treated as execution-only unless advice has been explicitly rejected and the appropriate advised-sales rules have been followed.”

This matters. An AI agent that starts telling a borrower which mortgage to choose is no longer simply being helpful. It could be providing regulated advice.

The real risk for advisers

The AI query summarised as follows: “AI is unlikely to replace mortgage advisers as a profession. However, advisers who ignore AI may lose ground to those who use it effectively.

“The winners are likely to be advisers who combine:

• Faster AI-backed research
• Strong client care
• Clear advice records
• Good protection conversations
• Clean compliance
• Better follow-up
• Strong knowledge of specialist cases

“The losers will be those who offer slow service, poor communication and little more than a rate comparison.”

In my view, there is very little to disagree with here. While it’s reassuring to see that AI has no immediate plans to take over the mortgage world, a more interesting question might actually be: Which advisers will be the most useful when every adviser has AI?

When everyone has access to similar technology, success is unlikely to be determined by AI alone. Instead, it will come down to how effectively firms combine technology, expertise and customer service to deliver better outcomes. And while AI may be built on prompts, long-term success will still be built on choosing the right technology partnerships.