This week’s first comments are in response to: Consolidation ‘inevitable’ for ‘cottage industry’ mortgage brokers ‒ analysis
Andy Wilson said: “This will be an interesting discussion. There is no doubt mortgage brokers are under pressure, from reduced levels of business, regulation, tighter supervision, whether DA or AR, and 1,001 other pressures.
“However, brokers are a resilient breed, and have demonstrated over the years that they are able and prepared to adapt and weather the many storms that have hit them. It’s been a tough few years but many firms are still functioning well and continuing to provide good service.”
He continued: “The movement of firms from Tenet is largely down to the network ignoring the protests from their AR firms, and largely over a poorly-introduced CRM system. In my case, I left them earlier this year due to a sudden introduction of an overbearing compliance regime. However, the firms they are dumping are not consolidating, they are merely moving to a new network or taking the opportunity to go DA.
“I agree that some advisers will hang up their mortgage boots and decide now is the time to call it a day. We have a lot of older advisers in this sector, and retirement is probably viewed with desire by some. However, many firms comprise just one or two advisers – and they tend to serve a local market where they are well known, respected and delivering great outcomes for their clients. If they can do this profitably, they may see no reason to consolidate.”
Wilson added: “What advisers will need to do, however, is look closely at the technology they are using, look closely at how they can better service existing clients, who can provide new advice opportunities and referrals, and ensure they are managing costs as effectively as they can. Technology can help here.
“Advisers who run their firms the same way as they did 15-20 years ago will not survive. For example, I still hear of advisers with filing cabinets full to the brim with paper client files, and they are still adding to them.”
He said: “I do not run a large firm and so do not know what pressures the bigger firms may be feeling, and whether the principals will consider it appropriate to merge with others or not. However, as a smaller firm with a new network who seem to respect the smaller-sized adviser businesses, and provide strong compliance, marketing and financial support, I don’t see a need to climb on board with bigger firms and consolidate. I suspect there are many thousands of us in a similar position.”
‘A good broker still has to go through the same process as a remortgage’
This week’s next comments are in response to: Low lender margins mean proc fee alignment off the cards, lenders say
disqus_8fOMMy2pIO said: “So under Consumer Duty, you have to undertake the best for the client, but act as a charity in the process because product transfers get paid less, and that is when you have fended off the lender wanting to retain in house.
“But how does that tie in with Consumer Duty as regards best advice for the client? Complete lack of joined-up thinking – nothing changes.”
Adam added: “The margin that lenders make on product transfers is significantly higher compared to new business due to lower processing costs – plus you all know this from business 101. Cheaper to keep existing clients that acquire new ones.
“However, they are reluctant to pay brokers for it as clients can do it themselves directly, non-advised execution-only. It is not reasonable to assume that simplifying a form gives justification for higher revenue for a high street lender and lower revenue for broker compared to new business.”
He continued: “A good broker still has to go through the same process as a remortgage. One high street lender I know does not go through the full process for their direct execution-only non-advised process and does not for product transfer cases we send them. It’s cheap.
“Lenders may argue that they have to squeeze brokers because “interest rates may go down”. What? I thought they had buildings full of bankers. Pricing with volatility in mind is literally what bankers do.”
‘Short sighted’ to delay Net Zero
This week’s last comment is in response to: Three quarters of landlords support scrapping minimum EPC requirements
disqus_8fOMMy2pIO said: “Short sighted by Sunak to do this, as some 14 per cent of emissions come from property, and it will have to be addressed at some point, with less time to undertake as net zero is due by 2050.
“Pandering to landlords on his backbenches and Whip’s office. A complete lack of vision as regards an alleged Green economy. His statement could have introduced tax breaks for such remedial work to be undertaken.”
The comments here are from our readers and do not necessarily reflect the views of Mortgage Solutions and Specialist Lending Solutions.
