What more should brokers do to encourage business from online?
In Market Watch this week, our experts say:
Stephen Smith, director of housing at Legal & General
Generation Y requires a different business model from the mortgage broker of the future… [pg2]
Lea Karasavvas, managing director of Prolific Mortgage Finance
The industry is increasingly embracing social media, but concrete FSA guidelines are needed for a true breakthrough… [pg3]
Frank Eve, managing director of Frank Eve Consulting
Opportunity abounds, with lenders years from providing the kind of online customer service and tools that brokers can take advantage of now… [pg4]
Stephen Smith, director of housing at Legal & General
In a speech I gave to the CML conference last week, I talked about “Generation Y” – people born between the late 1970s and the late 1990s – and how this group of consumers might want to obtain mortgage products and mortgage advice when their time comes.
I have two teenage sons and I said that they were as likely to go into a bank branch for advice as they were to wear a top hat.
My point is that this coming generation do not look for advice from men in suits or scientists in white coats – they trawl the web, get recommendations from friends and family, and from sites like Trip Adviser or Mashable, and then probably want to purchase online too.
Yes, it is true that a mortgage will still be the biggest financial purchase of their lives and that, however confident they feel at first, they will probably end up wanting advice.
Yet, that does not mean human face to human face in an office or a branch.
The UK is moving to superfast-broadband over the next few years and with that will come the real possibility of real-time face-to-face live interaction over the internet, perhaps just chat as at present, but probably with a video link too.
It is not at all far fetched to imagine two people carrying out a mortgage interview together, looking at sourcing system results and quotes, and completing a mortgage application together when they are in totally different parts of the country – or even in different countries.
One business model does not have to fit all consumers.
Look at PC World – selling big ticket items that customers want advice about, in a way, a bit like a mortgage.
You can go into a branch if you want and get advice there or over the phone or by live chat, then you can buy in the branch or online. It is up to you. PC World doesn’t mind; flexibility is built in.
Might this be the model for the mortgage broker of the future?
Lea Karasavvas, managing director of Prolific Mortgage Finance
While there is always going to be a place for face-to-face advice, younger people are increasingly using the likes of Twitter, Facebook and LinkedIn to find brokers.
Indeed, the use of social media is becoming increasingly ingrained in the business models of modern broker firms and, in many cases, is one of the key drivers of their marketing campaigns.
The FSA guidelines around the use of new media and technologies remains vague and seems to be something it has not quite tackled yet. But what’s certain is that more and more brokerages are appearing on social media platforms.
In recent years, lenders have started to move towards online submission of business, with very few accepting paper-based applications. We are also starting to see more lenders appear on the likes of Twitter and Facebook, using them as a way to converse and communicate with brokers.
Social media is starting to change the direction of the industry slightly, but I believe that face-to-face meetings with clients will always remain key, as the rapport built during personable meetings cannot be replicated over email and telephone.
While younger generations are using social media to source many things, including brokers, once that is done, they would still like to meet the broker in person.
Moving forward, the only way the industry can encourage the use of social media tools is by getting clearer guidelines from the FSA as to how they can be used correctly.
It is the fear of regulation that is keeping many brokers away from using social media and the internet.
However, it is clear that such methods of communication are becoming more widely used and not just by the younger generation, as they are appearing on most adverts, business cards and emails signatures.
Rather like the introduction of email and websites, links to Twitter, Facebook and LinkedIn are now appearing everywhere and, if brokers fail to embrace this change and these technologies, they will be missing out on a large target market.
The industry model is definitely changing and it is up to us, as brokers, to change with it – for our own survival.
Frank Eve, managing director of Frank Eve Consulting
Mortgage intermediaries need to take a leap forward to grasp a growing market of new mortgage clients who want information, advice and communication instantly at the touch of a screen.
This opportunity exists, because lenders are many years from providing easy access to information, advice and automated transaction functionality direct to consumers online and the mortgage intermediary is well placed to provide valuable, flexible and instant online advice.
The basic tools are a database of existing clients, website, email broadcast facility, online newsletters and client surveys supplemented by lead generation and adwords on sites like Google.
The website should also be set up to be placed as high up the search engines as possible.
These are the basic tools, but they must be used in a strategy that is driven by interacting with clients using social media sites, such as Twitter, Facebook and LinkedIn, to bring issues, products and opportunities to the attention of a growing client community.
The next stage is to utilise screen-sharing technology to conduct ‘face-to-face’ advice sessions with any client remotely and instantly online.
Any information that is on the desktop of the adviser, such as PowerPoint, internet page or CRM data, can be shared with clients over an encrypted, secure internet connection.
In this way, the website becomes a communication hub providing the client with the opportunity to interact directly with an adviser. Access to the site needs to be available via mobile and tablet as well as PC.
By growing a database in this way and using customer profiling software to analyse client needs, advisers can also sell in relevant non-mortgage products such as protection and life insurance online.
