There is more to know on a single sector of the market now than arguably there was for the whole market a few years back.
Lending into retirement, mortgages for the self-employed, overseas and expat mortgages, buy-to-let tax rules and portfolio landlords, not to mention commercial lending and bridging, all bring into question whether a broker can actually advise on the whole market in the way they would have done maybe ten or 15 years ago.
The question is, how can a broker stay on top of everything that is going on in all the different sectors?
The realistic answer is that usually they can’t and don’t.
We all focus on the things that we need to do most of, or that we do day in and day out.
For most high street brokers that is likely to be purchases and remortgages, with a little bit of buy-to-let as that is what they are most likely to see.
However, with variances in people’s circumstances ever increasing, the chances of having a self-employed client who needs a mortgage, or maybe someone who wants to buy their own commercial property is increasingly likely.
As is the likelihood of a landlord, who maybe started as an accidental landlord but now has four properties and falls into the portfolio landlord category.
It is not realistic to expect a broker to suddenly be able to take time to find out everything they need to know if they suddenly see a client who requires advice on an area they do not come across very often.
But a good broker will still want to find a solution, even if it is not something they do every day.
I don’t want the risk
This is probably why we have seen a significant increase in referrals for more complex mortgage cases.
Where perhaps brokers traditionally put more complex cases through a packager – and indeed some still do – a growing number appear to be choosing to say: “I don’t want the regulatory risk for an area I’m not comfortable in”.
Even if it is a non-regulated product, a responsible broker will still want to make sure that their client is receiving best advice.
Whether this is a significant shift in the market remains to be seen, but it could well be the start of a move that sees brokers specialising in certain areas more than they do now.
Referrals among specialists
It makes sense but will require more collaboration between brokers and between firms.
Many networks do already have a version of this model where they regulate their brokers to carry out mainstream mortgages, but everything of a specialist nature needs to be passed on to someone else in the network.
The same increasingly seems to be happening in the directly authorised market by brokers who are choosing themselves to specialise in one area and refer more unusual work to other specialists.
Technological innovations still seem a long way off from providing solutions in the specialist market, so the broker is still going to be the first port of call for some time yet.
Increasing referrals among groups of specialists has to be the most sensible option to ensure the client always receives the best outcome.