It is the same the world over, in both the human and animal kingdoms: whenever there is weakness, there is someone waiting to take advantage. Sometimes it is an instinct, but no matter how it is dressed up, it always comes back to survival of the fittest.
The media are as guilty of this as anyone, but there has been a worrying increase in the number of firms passing comment and making sweeping statements on the sustainability of mortgage advisers. Whether it is lenders installing advertising hoardings to promote direct-only deals and casting doubt on the honour of mortgage brokers or comments on which sectors of the market are contracting, it can look worse than it is.
It is true the mortgage advice sector has been wounded; only last week we had a Sunday Times Profit Track 100-listed broker, The Money Centre, announcing it is culling up to 35 jobs. But reports of the death of mortgage brokers have been greatly exaggerated.
Nevertheless, there is a danger that consumers will start to believe the importance of advice is waning, but we cannot believe it ourselves. Many firms are hurting and will need to diversify their offerings, and those who do not or cannot do this will suffer a drop in income or worse.
But brokers are survivors, and the value of good quality advice should never be underestimated. The industry should take heart from the news that mortgage advisers recorded the least amount of complaints in the Financial Ombudsman Service’s annual report, which found mortgage intermediaries registered only 2% of complaints.
Further positive news came from the fact that better products are coming back, such as products from Scottish broker ESPC Money Management and Halifax’s rates and fees cut.
A wounded animal is often more dangerous, but in this case we just need to continue offering good advice and look for opportunities. n
