Speaking at the Green Mortgage Summit, Matt Coulson (pictured), founder of Heron Financial, said incorporating more green conversations has to “start with the adviser being educated”.
“I think some funded education… seems like an obvious next step, because there is an expectation here that the broker is the conduit and I think that’s right, and it’s a good thing for us as a community, because it means the customer has to talk to us for something.
“But with that needs to come a little bit of support, and that probably should be led by lenders. It’s an easy one for me to say, but if lenders are under pressure from government to take their average EPC beyond a certain level, then they need to enable brokers to do that,” he noted.
For example, an adviser can ask somebody for their Energy Performance Certificate (EPC) digitally and then build that into the next set of questions and maybe have the discussion at the point of remortgage, when they are thinking about what they may want to do in their property.
Luke Loveridge, strategic adviser at Eco Approach, said you can either train up a mortgage broker to be “really in-depth on quite a few things” or embed questions in the process and then refer to a specialised ancillary department to follow-up.
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“That’s two different models there. I think one bit on that first model is around risk, so I’ve noticed from a number of brokers, and lenders as well, they don’t want to be necessarily recommending or suggesting or even signposting to certain contractors, and then it doesn’t work out – who’s going to be liable for when things go wrong? They don’t want to be the biggest part in the chain… you need to sort of understand the risk profile of what you’re doing and who you’re working with as well,” he added.
Much of the industry is ‘not in a position’ to do green training
Coulson said it put advisers through the Green Finance Institute (GFI) training, but “a lot of the industry is just not in a position to do that”.
He explained that firms with multiple advisers had “economies of scale” and it was “relatively straightforward to roll out training en masse”.
“But if the average adviser is a one-man band, how are they going to be expected to do this? A, in terms of funding it, and B, in terms of finding the time? I think we know that the resources are there, and for us, it gave us a really good macro review of the issues and then how an adviser can consider those in their conversation.
“We need to find a way to get that in front of more people. We need to be [a] bit more representative. We can, at times, be a bit guilty being in a bit of an echo chamber, so how do we get this out to advisers that are absolutely swamped? Because we need to support them and make it easy for them and free for them to get their attention.
“If we’re all in agreement, the broker needs to have the conversation. Well, there’s got to be a trade-off, because that’s half an hour of potential additional work that needs to be paid work,” he added.
He said the imposition of minimum fees was probably where the market “needs to head”.
“But, broadly speaking, there is just so much to do, irrespective of whether you’re a large broker practice or whether you’re a one-person broker firm. There is just so much to do and expectations [are] only growing, so if we want to be serious about people having these conversations, and we should, we just need to take it as a given that everybody thinks it’s the right thing, so you’ve got to pay them for the time, because otherwise, we’re all running around on behalf of lenders, having conversations to help lenders get government targets.”
Coulson said there was “hesitation” from brokers in terms of recommending third parties, which especially impacted the green finance space, as third-party referrals are needed to complete retrofit works, evaluations and so on.
“They’ve been burnt by several different potential referral routes, so it’s safer to just say: ‘Here’s some options, you go on Trustpilot and make the choice’,” he added.
Karina Gerdes, group head of sustainability at Mortgage Advice Bureau (MAB), said MAB partnered with certified firms because they have assurances in place and liability clauses, so if something went wrong with a referral, then the partner is responsible for its element, with MAB just responsible for the financial advice.
