Arranging the mortgage is just a small part of the job – Salentino

by: Tony Salentino, director of Complete FS
  • 25/10/2018
  • 0
Arranging the mortgage is just a small part of the job – Salentino
When I was broking for myself, I was taught that just arranging a mortgage was only part of the job.


Providing a family with the protection to ensure it would be taken care of that in the event of anything happening was just as important as the mortgage itself.

In the years that followed, we have had unfortunate episodes surrounding the sale of protection products.

We only have to look back to payment protection insurance (PPI) mis-selling, and further back, the Mortgage Indemnity Guarantee (MIG) scandal, followed by the witch hunt over the sale of low cost endowment policies to see why advisers lost their appetites for providing advice on protection issues.

The sad outcome is that fewer customers are being informed about the benefits of ‘good’ protection because mortgage advisers still feel understandably reluctant to provide this kind of service.

Yet in talking to contacts among networks and those supporting directly authorised firms, it remains an uphill battle to persuade advisers to press the case with clients that protecting themselves and their assets, is the right way to go.


Responsibility for all

A whole generation of advisers has grown up in a post-credit crunch and post-protection scandal world.

First-time buyers and movers are struggling to meet stricter affordability tests.

So there is a perfect storm of advisers reluctant to press customers already facing the prospect of making monthly mortgage payments, on paying more to protect them in the event of life changing events.

Yet, there is a responsibility on all of us to make customers aware of the dangers of ignoring this most crucial protection and we do so at our peril.


RIO – a new opportunity

According to an FCA report in January, one in five mortgages in the UK are on interest-only and of those, 1.67 million people are approaching retirement with an interest-only mortgage, having paid off little, if any, capital.

Many of those soon to be retirees have no plan in place to repay their mortgage at retirement.

With the FCA recognising that the issue required innovation from lenders, followed by their backing for a new breed of lending product for later life, the Retirement Interest Only (RIO) mortgage, along with the existing equity release products, the later life lending sector has a lot to offer advisers and their customers.

This is going to be the sector in which to be involved.



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