“The remortgage market is dead.”
If I had a euro for every time someone has said that to me recently, I could have singlehandedly bailed out Greece by now.
In truth the remortgage market is far from dead. A changed beast, yes, but one that is alive and kicking. How else can companies like mine, which focus heavily on the remortgage sector, record growth year on year during the recession?
The harsh reality is that brokers who cannot adapt to change and recognise opportunities in this new financial era are not good enough to make it in this business.
It was easy in the good old days, but the recession is no excuse – it just helps weed out the weak amongst us.
Successful brokers know that people need advice now more than ever as deals are increasingly difficult to come by and customers are no longer courted by every lender on the high street.
However, pessimism is currently rife in the industry and if the sector is to succeed we need to stop the rot now.
The first thing that advisors need to wake up to is that their negative attitude has a direct impact on clients.
If brokers have lost faith in their role in the industry, how can clients be persuaded that they need financial advice?
It also takes a broker with confidence in the market to seek business in new areas and change tactics when necessary to find new customers.
One-man bands may need to team up with other brokers and others will need to research areas outside of their usual patch.
Those who believe the industry is dead will struggle to generate new business in this way.
However, if you consider how much more difficult it is for the man in the street to access loans, there’s a greater pool of people out there in need of brokers’ expertise and professional advice than ever before.
As professionals in our industry, we have access to a wealth of information and lenders that consumers do not.
Brokers need to educate their clients in this difficult financial climate and build their trust by demonstrating their valuable skills and knowledge. We are not waiters and order taking is not in the interest of any client.
No one is going to pay for our advice unless we offer them something they could not achieve for themselves.
Our goal is to ensure that clients are not only left in a better financial position after talking to us, but they have a better understanding of their financial situation, really do understand how indexation works, how overpaying reduces overall costs and exactly what they are saying no to when initially declining the protection from assurance products.
Some of these conversations can be challenging and even uncomfortable, but to a man, the results are always extremely well received.
I know; I receive the thank you letters.
The other favourite whinge of those not ready to step up to the mark that I tire of hearing is how the increasing burden of compliance is “crippling” business.
I’m no fan of the inconsistencies that we face from our regulator, but at the end of the day, regulation is a big part of what we do; you can either waste time wishing it wasn’t there or give it the time and resource it requires.
If this means you need to re-align yourself with a partner company that can facilitate your needs with a department dedicated to compliance, then so be it.
Brokers will benefit in the long run and can focus on the part of the business that they trained for and that makes them money.
Treating Customers Fairly rules require constant training and assessment to ensure a duty of care to clients. Brokers need to take the lead and deal with clients for the duration of the mortgage term – taking on full responsibility for long-term planning.
If you are arranging simple interest-only mortgages without consideration for future repayment then frankly you are not doing the job asked of you by the client or the FSA.
Our best brokers are contacted again and again by faithful clients who trust their advice and benefit financially from taking it.
My glass is clearly of the half full variety where the remortgage market is concerned and that is because I know there is money to be made in this sector.
In the words of Winston Churchill: “The pessimist sees difficulty in every opportunity. The optimist sees opportunity in every difficulty.”
Good mortgage brokers really do have plenty to be optimistic about.
Martin Wade is director of Your Mortgage Decisions
