Rate hikes offer chance for advisers to show their value – Bawa

The speed of these changes has been something to behold. The latest figures from financial information site Moneyfacts show that the average five-year fixed rate has now passed 6%, reaching this unpleasant milestone for the first time in almost three years. Typical two-year fixed rates are not far behind either.

It’s not difficult to understand why this is happening. The ongoing conflict in the Middle East has unsettled financial markets, with the resulting uncertainty feeding through into the mortgage rates available to borrowers.

Many of us have been here before, seeing events elsewhere in the world – and sometimes far closer to home – causing a sharp shift in mortgage pricing. As a result, we know all too well the fear and stress this can spark among clients, who suddenly face the prospect of paying more for their mortgage each month.

And I’d argue this is when advisers really show their value.

Don’t wait for clients to call

There is no shortage of borrowers across the country looking at the latest headlines and wondering what they mean for their own mortgage. Do they need to move now to secure a new deal, or hold off in the hope that rates come back down? And just how much more are they going to have to pay each month?

Sponsored

Episode 6: What’s next for the industry? : Powered by Partnership podcast from Newcastle for Intermediaries

Sponsored by Newcastle for Intermediaries

While advisers don’t necessarily have all the answers here – we don’t have a crystal ball, after all – this does still represent an opportunity for advisers to take the initiative and start those conversations themselves, rather than waiting for clients to call.

That doesn’t mean encouraging every borrower to rush into a new deal. The right course of action will depend on their individual circumstances, from when their existing mortgage expires to their wider financial position. But what’s crucial is ensuring clients understand their options, and feel confident that someone is looking out for their interests, even when the headlines suggest there may be more difficult times ahead.

Making communication easier

It’s easy to say that this is the time for proactive communication, but actually delivering it is far harder. When lenders are repricing products at speed, advisers are already working incredibly hard to keep existing cases on track and respond to clients who are understandably concerned about what happens next.

Adding the responsibility of producing newsletters, social media updates and other client communications to that workload is no small task. And even when advisers have something ready to share, getting the necessary compliance approval can introduce further delays.

This is where having the right network behind you can make a significant difference, providing the support needed to not only develop the right messages but also communicate them to your clients quickly and effectively. The best networks are investing in this type of resource, whether it’s developing ways to sign off financial promotions more quickly or even producing the content directly, which you can use to reassure fretting clients.

The value of that support is particularly apparent when market conditions are changing quickly. After all, there is little benefit in preparing a timely update for clients if, by the time it is ready to share, the market has already moved on.

What really matters?

There is an important distinction between keeping clients informed and providing the individual advice they need, and advisers need sufficient time to do both effectively.

A timely email or social media update can help explain what is happening in the market and provide some reassurance, while also demonstrating to potential clients why professional, independent advice is so valuable.

But let’s be clear, it’s the conversations that follow where advisers make a genuine difference to their clients. The proactive communication prompts those discussions with individual clients about what they need, and how best to navigate the path ahead.

The role of a good network should be to make those conversations easier to facilitate, by removing some of the operational burden that might otherwise prevent advisers from reaching out in the first place. Ultimately, advisers should be spending their time advising, rather than getting bogged down in the processes surrounding it.

An opportunity to strengthen relationships

More costly mortgages are not good news for clients, particularly at a time when inflation is resurgent and outgoings on virtually everything are rising. But we need to recognise that such periods provide a great opportunity for advisers to show their value.

Borrowers will remember the advisers who took the time to contact them, explain what was happening and help them make informed decisions when the outlook seemed uncertain. By ensuring advisers have the tools and support to communicate quickly and effectively, networks can play a crucial role in helping them demonstrate that value, both now and when the next period of volatility inevitably arrives.