On 30 November, IPFA (Industry Panel for Financial Advice) in partnership with Aldermore and Sesame Bankhall Group held a Supper Club in London with advisers and brokers in attendance to discuss a wide range of topics including the current state of the market, what 2023 may have in store, and how brokers are meeting a new set of challenges.
Given the complexities in the current mortgage market, the roundtable debate swiftly turned to the expanding, evolving and educational role of the broker.
A representative from SBG highlighted the fact that since the disastrous mini Budget and the crisis that ensued, the profile of brokers has never been higher.
He said: “On television, they never talked about advisers or going to see a broker before but during the crisis, it became ‘before you do anything, go and take advice’.”
“You are making a difference”
This hunger for help from borrowers has changed the perception of brokers.
One attendee noted: “The thirst for advice is bigger than it’s ever been. People want help from someone whether it’s purchase, remortgage or new build.
“It’s become more complicated and the more complicated it is, the more advantageous for us. The simpler it is, people think they can do it themselves.
“But now people are looking at trackers or standard variable rates (SVR). For an adviser, you feel that you are making a difference. You are advising properly and clients will keep coming back.”
Others around the table agreed, with one broker noting that the “whole dynamic had changed”.
She said: “In the last 10 years, we were almost order takers. But now, brokers are having increasingly complex discussions on what clients can afford, explaining that they have been living way above their means and these are not nice conversations.”
How far can brokers go?
The idea that a broker’s role was now expanding into the arena of debt counselling was debated across the table. Many were in agreement that, given the cost of living crisis, it was now a fundamental part of the job. However, attendees also highlighted the complexity of the position and the need for training.
One adviser said: “Brokers will have to become debt counsellors and our brokers have never had to do that even when they were doing debt consolidation.
“Sitting down, having conversations saying that ‘you are spending too much on these items’, that’s a hard call for a broker to make. We need to train them up.”
She continued: “Brokers need to advise their clients on budgeting. I think moving forward we have to say this is the new normal and part of our advice piece will be proper budget planning. Like it used to be and it hasn’t been for a while because it hasn’t been necessary.”
Protect your protection
Another adviser noted that as part of that budgeting process, it was vital that brokers ensured that clients were protected and not prioritising their lifestyle over their life insurance.
He said: “A lot of people have started to take protection off. If we’re giving debt advice, we also need to be saying don’t cancel life insurance, don’t cancel other policies because that’s really important.
“It’s normally the first thing that comes off but we need to be giving the right advice and say if you’re struggling, that’s still the last thing you should lose.”
“You’re not their parents”
However, there were those that disagreed that brokers should become budget planners and debt counsellors, feeling that the move was a step too far.
One broker said: “I’m not sure on budget planning. How far do you go with it? If you say to someone ‘you’re spending too much on shopping’, I’d say ‘that’s none of your business’. There’s a limit to how much you can tell people.
“If you’re there for your clients, you can guide them but you’re not their parents.”
Although one adviser came back with a blunt response to that. He said: “Yes. But it depends how much they want the mortgage.”
“I don’t think we’ve ever been more important”
One aspect on which the panel was in full agreement was that, during the current cost of living crisis, it was necessary for the role to continue to evolve. And with that evolution will come opportunity.
One representative noted: “In the past we were only talking to clients once every five or 10 years. Now you could be dealing with the same client within six months or a year. It’s a big opportunity for us.”
Another agreed with that assessment, saying: “We are getting to talk more to our clients – and we are embracing that. You will have to do things more than once but in the long run, it will add value.”
The idea of adding value was echoed by another broker.
He said: “Being planners and counsellors is the only thing that can differentiate the broker from robo-advice or anything like that.
“If we’re not adding value to make their arrangement bespoke then what are we doing?”
The step change from being a mortgage broker into being an all-round financial planner may not be an easy one but it is one that advisers are relishing, according to one panellist.
She said: “If you speak to most people, they don’t think they’ll be able to have a financial adviser because they think that’s something rich people have, but a mortgage broker is so unique to the industry because we are that first step. We can be more accessible.
“We can advise people to go to those debt charities and tell them where they need to go. How they can budget. I don’t think we’ve ever been more important.”
Or as one attendee put it quite simply: “The future mortgage broker is taking up a role as the best-placed person in the whole financial services industry.”
In attendance
Alex Beavis, group director of mortgages and protection at Sesame Bankhall Group
Stephanie Charman, strategic relationships director at at Sesame Bankhall Group
John Cowan, chairman of at Sesame Bankhall Group
Caroline Mirakian, head of national accounts at Aldermore
Jon Cooper, head of mortgage distribution at Aldermore
Gemma Perry, sales manager at Acumen Mortgages
Dean Vellender, director of Easylife Alliance
Gary Godwin, sales operations manager at Fairstone
Tracy Gordon, director of operations and compliance at Mortgage Required
Tim Atkinson, managing director of Mortgage Required
Craig Head, director of Mortgage Required
Adam Kemp, independent financial adviser at AMAS
Rebecca Lewis, group director at Affinity
Rick Marshall, director at Affinity
