National network JLM Mortgage Services bosses believe brokers are failing to take a longer-term view for their clients and could be leaving customers vulnerable to Brexit-related economic upheaval.
They argued that a large proportion of intermediaries are influencing the market in favour of two-year deals in order to generate short-term increases in transactions and fees.
However, they suggest clients want and need longer term deals to provide security and stability during the likely upheaval of the UK leaving the EU.
JLM Mortgage Services head of mortgage finance Sebastian Murphy noted that lenders were recognising this need by making better longer-term fixed-rate deals available.
He argued that those products would take them through a potentially difficult period and represented compelling value to borrowers coming to the end of their deals now.
“Unfortunately, there are still large numbers of advisers telling lenders that clients want two-year deals when that is patently not the case,” he said.
“There needs to be some soul-searching from those who are pushing this fallacy because it’s poor advice in this market, especially when longer-term alternatives, where any extra cost for the client is minimal, are so readily available.
“That’s certainly not our approach as both advisers and a network that wants the best advice delivered to our clients.”
Clients deserve better
JLM Mortgage Services director Rory Joseph (pictured) echoed these points, noting that there was significant uncertainty around major economic factors such as employment and interest rates when considering the EU negotiations.
“This two-year product cash cow favoured by some of the larger firms is fast becoming poor advice,” he said.
“Advisers, and the networks that look after them, are in danger here of being far too short-termist by shovelling these two-year deals down clients’ necks when a three-year-plus deal would be far wiser, and would ultimately give the client some breathing space and stability about their mortgage payments when the UK leaves the EU.”
Joseph added that there should be an adviser-led move towards three-year-plus products providing the client with stable payments during that potentially difficult time.
“This is not the time to be churning deals in order to make a quick buck – clients certainly need better than this given what could lie ahead,” he concluded.
JLM Mortgage Services was established in 2002 and has 43 advisers spread across seven appointed representative firms around the UK.