Curry Club guests
Adam Smith, head of mortgages, Police Mutual
Mike Hodgkinson, director, Xact Mortgages
Peter Edmonds, director, Central Financial Services
John Wakefield, partner, New Homes Mortgage Services
Stewart Bartle, partner, New Homes Mortgage Services
Keith Johnson, mortgage adviser, SJ Mortgage Solutions
Louisa Sedgwick, head of intermediary distribution, Leeds Building Society
Abigail Jones, intermediary marketing manager, Leeds Building Society
Bev Ford, business development manager for central and West Midlands, Leeds Building Society
Victoria Hartley, group editor of Mortgage Solutions and Your Mortgage
Samantha Partington, news editor of Mortgage Solutions
Location: Pushkar, 245 Broad St, City Centre, Birmingham
Awadhi Gosht Korma, diced lamb, slow cooked in a rich creamy sauce infused with kewra (Himalayan screwpine flower) water, saffron and the chefs chosen spices.
The discussion opened with a debate around the importance of service over rate and whether the two could be viewed in tandem or whether one was always sacrificed over the other.
“I find rate probably quite close to service in terms of conversations we have with borrowers but, for example, when the Halifax was hitting its brilliant service levels it did so because the rates weren’t there,” said one attendee.
A number of brokers around the table specialised in the new-build sector and for them the reliability of the lender’s service was paramount given that they have the expectations of the borrower and the builder to manage. Attendees who operated in the mainstream mortgage market stressed they valued lenders’ service regardless of the transaction type.
One attendee said that while market-leading rates did catch the eye of vendors it was often a poisoned chalice because the lender would get swamped with business volumes it couldn’t handle.
Frustrations were shared over lenders offering amazing rates and soaring to the top of the best buy tables but brokers found that they couldn’t use these lenders because the service was so bad it would not be the best advice. Virgin Money were singled out as one lender which stayed away from the top of the best buys so it could offer a good service.
The debate progressed to exactly how service moved from being ‘just average’ to ‘exceptional’. A dedicated underwriter who deals with all parts of your case was prized among some attendees while others thought intelligent underwriters were the element which set service levels apart.
The point of intelligent underwriting was picked up by the Financial Ombudsman Service in its latest round up of complaints about the financial service industry. It described some lenders’ approach to the assessment of applications as ‘box-ticking’ and ‘inflexible’ with a word of warning that lenders should be looking at individual circumstances more often.
“It’s great to have an underwriter who thinks,” said one attendee. “A recent case of mine featured one applicant who had received a pay rise so I included a letter confirming this circumstance. The underwriter said we might need to go for an employment reference but then noticed the applicant was also in receipt of child benefit which hadn’t been taken into account so that was used instead. That’s intelligent underwriting.”
The group agreed that the quality of people working in financial services had deteriorated since the financial crisis.
Louisa said that she had found it difficult to recruit quality people to fill roles on her sales team. “I’ve recruited a lot over the last 12 months. When I joined in April last year we had a team of 10 people, we’ve now got 35 so we’ve made massive inroads in recruitment.” Louisa agreed there was a definite shortage of talent causing her to hold out for the right person rather than rushing to fill the role.
The BDM role was singled out as one of the most difficult roles to fill with a talented individual which prompted chairperson Victoria Hartley to ask the group, ‘when it comes to BDMs – what does good look like?’
“A clear communicator,” was the first comment to fly across the table. “They need to be able to come out of the office and explain exactly what you need to get without toing and froing so we know where we stand with a case.” Louisa stressed the importance of back-up support for the BDM. “If the lending criteria is too difficult, the underwriter has been too difficult or the valuer is all booked up there’s absolutely no point in tearing the head off the BDM because there’s not an awful lot they can do except escalate it.”
Enthusiasm for the job, positivity about their own company, a university-level education and direct access to key decision makers within the lender were all raised as valuable attributes in a BDM.
Victoria asked attendees to turn their attention away from the obvious benefits of quality human interaction towards lender investment in technology. While the industry is seriously lacking in modern technological advancement intermediaries have been put on their guard to expect an ‘attack’ from lenders launching new systems to grab back direct to consumer market share. Victoria asked the group of brokers if they were concerned about the sort of strides lenders were making with technology and the impact this may have on the advice brokers give to their clients.
The question was met with scepticism by attendees. “I think the real question is – will it make strides at all?” said one attendee. “Because where are we now – 2015 and we’re still serving clients from a telephone-based practice. We’ve got members in Scotland and down on the south coast having to physically post hard copies of passports and driving licences to an office in Lichfield for them to be scanned and posted back.”
The general feeling about an alleged ‘attack’ was not one of concern because they thought by the time the technology was brought to market it would have taken so long to develop it would be ineffective. The group talked about today’s younger generation and their relationship with technology and whether this, in fact, would be the source of the attack on the broker advice market.
Younger borrowers are much more comfortable shopping around online for financial products prompting brokers to make their websites and services easier to find by using ad words and trying to get listed on aggregated websites which recommend mortgage advisers. Louisa said that it is important for brokers to make themselves visible to the online mortgage hunter but after the initial signpost to the broker’s contact details it will ultimately result in a phone call or face-to-face appointment.
Curry Club Conundrums
What is your biggest concern about the forth coming Mortgage Credit Directive?
Advisers: lenders failing to have systems and processes ready in time
Top quote: “The biggest worry is that lenders, from a systems readiness and training point of view, don’t deliberately throttle-back lending because their resources are constrained.”
What will be the biggest change in lending policy this year?
Advisers: age limits on mortgages will go up
Top quote: “It will probably only happen with the small to medium-sized building societies which are actually seeing their natural demographic getting older so they need to do something about it. They are going to start to think about 50-year terms or maximum ages of 80 more commonly, this year will be a really key year for this change.”
Which segment of the market will struggle in March next year when the European changes are made law?
Advisers: new build
Top quote: “New build lenders need to be ready in September or October because borrowers need mortgage offers valid for six months to give things time to complete.”