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Half of all brokers fear ‘robo advice’ – Legal and General

by: Heather Greig-Smith
  • 12/10/2017
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Almost half of brokers see robo-advice and technology as the biggest threat to their business in the next three years.

That’s according to research from Legal and General Mortgage Club. The figure has jumped 11% since Legal and General asked brokers the same question a year ago, and 14% in the last 18 months.

The company said this shows the industry has more to do to reinforce the opportunities presented by technology.

Brokers were surveyed at the Legal & General Mortgage Club Live Conference about their views on the future of the mortgage market, its opportunities and challenges.

A smaller number of brokers at 22% believed customer behaviour was the biggest challenge to their business and a similar number stated non-industry disruptors  at 20%. The smallest challenge to business, with one in ten brokers, was lenders.

On a more positive note, 83% of brokers expect to diversify their business in the next 12 months by adding in new products, services or technology to remain competitive. Just 17% of intermediaries did not expect to diversify over the next year.

Jeremy Duncombe, director of the Legal & General Mortgage Club, said there is much brokers can do to be ready for future challenges.

“Instead of viewing technology as a threat, advisers should see it as an opportunity and an enabler to help them meet the changing needs of the market,” he said.

“For many borrowers, the advice of a human broker remains central to their process of securing a mortgage, but advisers cannot ignore the implications of a rising generation of future homeowners who expect the incorporation of technology in all their financial transactions and communications, and in many cases a holistic offering.”

Duncombe added: “Whilst it is positive to see that more than three-quarters of brokers do plan to diversify and adapt their businesses, including with technology, as an industry we must encourage the rest to not shy away from technology, but instead use it to futureproof their businesses and make their propositions even more appropriate to the next wave of younger borrowers.”

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