Top 10 most read mortgage broker stories this week – 16/07/2021
Beyond that, lender initiatives on EWS1 forms and post-pandemic criteria and market conditions topped the headlines, with some M&A activity also piquing interest.
UPDATE: Police to investigate Savills’ employee Twitter account over racist Euro 2020 football tweets
Seven lenders agree to cover cost of submitting EWS1 forms to FIA portal after delays
NatWest to unveil self-employed criteria change in August
Mojo Mortgages acquired by Uswitch and Confused.com owner
National Crime Agency recovers £2m from developer-landlord in civil case
Mortgage lenders offering larger loans but product options tighten – MBT
US digital lender Better enters UK mortgage market with Trussle acquisition
Online estate agent Strike raises £11m in funding and appoints CTO
Poor credit househunters on the rise as pandemic takes toll on family finances
Half of pandemic homebuyers fear they overpaid for their property
AMI launches 15 minute industry diversity and inclusivity survey – take part now
With support from Aldermore and Virgin Money, the 15-minute anonymous survey run by an independent search agency is being offered to the whole cross sector industry, at every level of seniority.
Please fill in the survey here or share it with colleagues via the social media buttons at the bottom of the page.
AMI said the rising prominence of the issue and the discussion paper from the combined banking and conduct regulators will ensure that it continues to be a focal point for the industry.
Robert Sinclair, chief executive of AMI (pictured), said: “This is a subject that evokes significant emotion and this is your chance to give us your view. We’re looking to understand how inclusive our industry is and whether we can do more to help firms achieve diversity of thought and an inclusive culture? If so, where do we start?”
He added that much of the agenda is being driven by the younger generations and it is up to those of us who have been in the industry longer to accept the challenge, to keep up and to stay relevant.
“AMI is doing this work because people who I hope are my friends have been brave enough to bare their souls and talk about their lives and experiences. Inclusivity and equality needs allyship, partnership and feeding.
“I would like to think that AMI, by working in partnership with our member firms and lenders, can help firms make some tangible changes to how they embrace society in its widest sense and to ensure that everyone is able to bring their whole, authentic self to work,” Sinclair added.
Fill out the survey here.
Regulators lay out plans to improve diversity and inclusion in financial firms
This follows recommendations made by the Treasury Committee yesterday, stating that regulators should consult with the industry on all policy changes.
Suggestions such as targets for representation, linking remuneration to diversity and inclusion metrics and measures to make senior leaders directly accountable are among the proposals mentioned in the paper.
It also considers how regulators should approach diversity and inclusion when it comes to non-financial misconduct.
The regulators said they believed increased representation would accelerate statutory objectives by resulting in better governance, decision making and risk management within firms. They also suggested it would lead to an innovative industry with products and services more suited to the diverse needs of consumers.
To assess progress, it has been proposed that firms collect data about their workforce.
Prior to this, there will be a one-off pilot survey later this year to form policy suggestions and test how firms can provide data with the intention to consider regular reporting in the future.
The regulators are also asking for views on how any changes could be tailored to specific categories of firms, to ensure it is proportionate.
Sam Woods, deputy governor for prudential regulation and chief executive of the PRA, said while some progress had been made in some parts of the financial services sector over the last decade, the discussion around representation was still in its early stages and needed to be sped up.
He added: “A lack of diversity of thought can lead to a lack of challenge to accepted views and ways of working, which risks compromising firms’ safety and soundness.
“The paper we have published today is intended to start a new conversation with firms about how we can best move forward across the sector, while we also take steps to improve diversity and inclusion within our own organisations. I encourage firms and other interested stakeholders to give us their views on our proposals.”
Nikhil Rathi, chief executive of the FCA, added that regulators were concerned a lack of diversity and inclusion weakened the quality of decision making.
Jon Cunliffe, deputy governor for financial stability at the Bank of England, said: “Diversity and inclusion is beneficial for financial stability. Groupthink and overconfidence are often at the root of financial crises.
“Enabling a diversity of thought and allowing for an array of perspectives to coexist supports a resilient, safe and effective financial system.”
The discussion paper is open until 30 September 2021. The feedback and data will be used to form proposals, with a joint consultation planned for Q1 2022.
LSL Property Services launches two employee forums as part of ESG strategy
Both forums will be chaired and made up of employees from across the group, with the chair reporting directly to LSL group chief executive officer David Stewart. They will discuss relevant issues and aim to report their conclusions and make recommendations to group management.
The inclusion and diversity forum will consider a range of issues which impact employees from underrepresented and disadvantaged groups. Issues that it could potentially cover include LGBT+, disability, race and gender.
The communities forum will develop and improve how the group can enable colleague’s charitable, community and voluntary initiatives, and explore new opportunities for LSL.
The forums came about following employee feedback from LSL’s employee engagement forum, which aims to get employee perspectives considered in board discussions.
Stewart said: “Both [forums] will play a pivotal part in driving change within the business and, importantly, ensure that employee views and opinion are captured and can continue to be acted upon.
“We’ve been delighted with the response from colleagues so far and, with forum meetings already underway, the board are looking forward to hearing their views, opinions and ideas to help in shaping LSL for the future,” he added.
Rising Star: Rebecca Hayes, Family Building Society
What does your role entail and how long have you been doing it?
My team and I look after the IT operations for the Family and support for the technology and systems. We deliver all technical change across the business, too.
What attracted you to working in the mortgage sector?
The Family caught my eye because of its innovative products. In a market that is typically very traditional and a little old fashioned, the Family offers products that allow parents to help their adult children to buy a home with a small deposit and lend to those coming up to and in retirement.
When I did my homework, and going through the interview process, I found that the Family truly does things differently — in a world in which “computer says no,” is considered the norm.
I was surprised to find that our underwriting is done manually, which means we are able to help people whose circumstances don’t fit the usual lending criteria. All of our customer service teams are based in our office in Epsom. In a context where many businesses have outsourced to overseas as much as possible, to cut costs, this is refreshing.
What were you doing in the five years before starting here?
I worked for an insurtech and then joined a property insurance company, as its’ first chief technical officer, where I looked after the full spectrum of IT functions, helped to re-structure the operating model and developed IT strategy.
What personal talent/skill is most valuable in doing your job?
Supporting and coaching my team. Any business is only as good as its people.
I am very fortunate to be working for an organisation that really values its staff. Many colleagues have been with us for decades.
What personal talent/skill would you most like to improve on?
Not laughing at inappropriate moments and not rolling my eyes.
I am trying to get up to speed on the financial accounting side of our business. Our chief financial officer is patiently teaching me the intricacies of capital and liquidity, while I ask endless questions and he tries not to roll his eyes.
How has the pandemic changed the way you approach your job?
Like a lot of people, it’s made me re-evaluate my work life balance. I still enjoy being in the office and seeing my team, but I also enjoy the flexibility of working from home.
Where do you see yourself in five years’ time?
Our CEO asked me the same question in one of my interviews and I said: “in his job”. This is rather ambitious, but I certainly hope to stay at the Family for the long term.
If you could go back in time and tell yourself something five years ago, what would it be?
Don’t forget to take people with you. When you implement any sort of change in a business you must engage people. They need to have a say and feel part of the change, rather than feeling like change is being dictated to them. I learned this the hard way.
What’s been your lockdown coping strategy?
My Peloton exercise bike. It’s probably the best thing I have ever bought.
What’s the biggest challenge you’ve tackled so far in your career?
I have never taken a role that wasn’t challenging. That is where you can make the biggest difference and affect real change. It gets me out of bed in the morning.
If you could have one superpower, what would it be?
A conversation I have had many times with my two boys.
Being able to travel through time would be pretty cool, but then I wonder if I went back in time and tried to undo mistakes that I have made would I still be the same person? Probably not, so I’ll go with my boys and say Hulk strength.
And finally, what’s the strangest question you’ve ever been asked?
I was once asked in an interview how I would manage a male misogynistic pig. To which I replied: “Why do you employ someone you consider to be a male misogynistic pig?”
I didn’t get the job.
FCA vows tough action on firms with diversity issues and admits ‘we too have work to do’
Nikhil Rathi (pictured), chief executive of the FCA, said the watchdog was drawing up new regulations for firms to follow and if diversity improvements were not made it would take action.
The regulator is considering adding to its conduct risk questions for managers and looking at ways it can use its supervisory powers to crack down on firms not following the new regulations.
Speaking at a launch event for the Women in Finance Charter Annual Review, Rathi said that there had been improvements in female financial representation since the Charter was introduced by the Treasury, following Jayne-Anne Gadhia’s 2016 review of women in financial services.
The objective of the charter is to tackle the issue of a lack of gender diversity in senior management positions in financial services. Firms signing up to the charter are, among other commitments, pledging to set internal targets to increase the number of women in senior roles and publishing their progress annually on their website.
More to do
In the five years since the charter was launched, 35 per cent of the 209 signatories that committed to its objectives before September 2019 have met their targets and 36 per cent are on track to meet them, research from think tank New Financial revealed.
However, although 62 per cent of firms that have signed up to the charter said they have seen the numbers of women in senior management improve, among those firms women still accounted for less than a third of senior management.
The lack of women of colour in senior financial services positions, said Rathi, was “a particular concern”.
“This lack of diversity at the top raises questions about firms’ ability to understand the different communities they serve, and their different needs,” he said.
The FCA’s first step is to formalise its regulatory approach to diversity and inclusion and then to spell its expectations to the market.
Rathi wants to expand the conduct risk questions that senior managers of all firms must consider to include one that asks, “is your management team diverse enough to provide adequate challenge and do you create the right environment in which people of all backgrounds can speak up?”
Over the next 12 months, if firms haven’t improved it will look at how it can use its supervisory powers to force change.
“There are supervisory tools we can draw on,” said Rathi. “For example, I want to consider whether the diversity of management teams, and the inclusivity of the management culture they create, could be part of our consideration of senior manager applications.”
The FCA is also considering using a similar approach taken by the Nasdaq, a stock exchange in the US, which requires all companies listed on the exchange to have, or explain why they do not have, at least two diverse directors.
“As part of our regulatory work on diversity and inclusion and the listings framework, we will be exploring whether we should make similar requirements part of our premium listing rules,” he said.
FCA falls short
Rathi admitted that the FCA had fallen short of meeting its own female leadership targets. The regulator said it had set “ambitious targets” to have 45 per cent its senior leadership team made up of women and half by 2020.
“That we missed our 2020 target by five percentage points shows we too have work to do,” he added.
As an employer, Rathi said the FCA was “determined” to improve its diversity.
He said: “As a regulator, we want the same from the firms we oversee and in the markets we regulate. Not because it is a social good – although, frankly, that should be enough. We care because diversity reduces conduct risk and those firms that fail to reflect society run the risk of poorly serving diverse communities. And, at that point, diversity and inclusion become regulatory issues.”
DIFF podcast: ‘Silence is a form of complicity’ – the benefits of raising difficult conversations
It also heard about the steps two major financial organisations are taking to engage with people from diverse and underrepresented groups within their workforces.
Real examples were relayed of how diverse backgrounds can bring benefits in the mortgage industry.
Speaking on the podcast, Ali Crossley, managing director of partnerships at Legal & General Insurance, explained how important it was to be driving change within workplaces to make them more diverse and inclusive.
“It’s about how everyone can be themselves in the workplace no matter what they look like, where they come from, what they sound like or anything else,” she said.
“And any benchmarks or focus, on insuring that is absolutely the case, and making organisations really think about it, and no longer being silent on these matters, is important.
“Silence is a form of complicity, frankly. We’ve avoided these difficult conversations for too many decades and it feels now is a time for us to act.
“It’s fantastic that we’re having this conversation and that we see many organisations rallying around and really focusing in this space.
“I really hope this is the decade we see a seismic shift in these areas that need to have been sorted out years ago,” she added.
Helped brokers and underwriters to understand
Crossley was speaking to AE3Media ambassador at large Bharat Sagar, and they were joined by Saj Latif, national account manager at Lloyds Banking Group.
Latif discussed his experiences growing up and being the only Muslim child in a Roman Catholic school before then entering the world of finance.
He explained how his background had helped to support customers who may otherwise have lost out and gave a powerful example:
“Being able to understand how the Asian community works has definitely helped,” Latif said.
“Not many people understand some customs in Asian community, especially when it comes to financing and getting onto the housing ladder. They will build a deposit through effectively a social savings scheme called a Kamaytti.
“Say you have ten people saving £100 a month, and in ten months’ time will earn £1,000. This Kamaytti lets you pull out that £1,000 early, but you have to keep paying in for the full ten months.
“What I’ve previously done when I’ve talked to brokers about this, I’ve helped our underwriters to understand the concept, and this has definitely helped brokers and in turn customers to secure finance.
“Without that knowledge, the customers would not have had the finance to buy the house, certainly not at that time through us,” he added.
Role models and recruitment
Latif also noted that it “absolutely helps” to have role models from similar diverse backgrounds in senior positions.
“It does give me a sense of belonging and confidence that progression is there if you’ve got the ability and that’s probably not the same for some of my colleagues in other places,” he said.
He is currently involved in several initiatives within Lloyds Banking Group, including being part of a working party.
He is helping colleagues to understand the impact of racism and unconscious biases in a safe workplace space.
“I’m also going to be having conversations about recruitment policy and process and ultimately make it a whole lot easier for Black, Asian and Minority Ethnic (BAME) people applying for roles,” he added.
Reverse mentoring culture shift
Crossley then explained the reverse mentoring venture which L&G is introducing, where eight executives are mentored by a member of one of the diversity groups that have been identified.
“I’m really excited about this,” she said.
“The whole idea is to make sure that the people at the top of the insurance business can walk in the shoes to understand what it feels like, what the issues might be, to be in one of these groups.
“That’s the idea, to basically open the mind and open the eyes and to listen and to learn and its something you can only go on your own experience.”
The intention is then to roll it out across the organisation to other parts of L&G and also throughout the insurance business, not just senior level.
“We’re starting there because this is going to have to be a top-down cultural shift, and signal that this is the right thing to do, so people can be their full selves when they come to work,” she added.
Investment managers issue diversity warning to UK’s biggest firms
The Investment Association (IA) said that managers will be “turning up the pressure” on FTSE 350 companies to improve the diversity on their boards in this year’s AGM season.
Its Institutional Voting Information Service (IVIS) will be issuing an ‘amber-top’ to any company that does not either disclose the ethnic diversity of its board, or outline a creditable plan for having at least one director from an ethnic minority background.
Investors are also looking for more progress on gender diversity, with firms whose board comprise of 30 per cent or less female directors being handed a ‘red-top’. This is a step up from the 20 per cent threshold in place last year.
Amber-tops will also be issued to businesses that are not viewed as doing enough to address climate change concerns. The IA said investment managers want to see companies reporting on climate-related risks in a “clear, consistent and comparable” manner
Andrew Ninian, director for stewardship and corporate governance at the IA, said that the UK’s boardrooms need to reflect the diversity of Britain today.
He continued: “With three-quarters of FTSE 100 companies failing to report the ethnic make-up of their boards in last year’s AGM season, investors are now calling on companies to take decisive action to meet the Parker Review targets. Those who fail to do so this year will find themselves increasingly under investors’ spotlight.”
The IA said investors will continue to focus on executive pay too, having already called on businesses to treat their executives in line with the rest of their workforce.
It warned remuneration committees against “compensating” executives for any reduced pay they may have experienced last year, whether through catch up awards or disproportionate salary increases.
DIFF: ‘We cannot ignore history’ when tackling workplace inequality
Sable Lomax, director of programmes and communications at Fearless Futures, told the latest executive meeting that plenty could be done to help improve representation and equality in the workplace and society, but it depended on systemic restructuring, not just pushing individuals into the spotlight.
She emphasised biases could not be undone without acknowledging the in-built privileges some people had been given, accepting what minority groups had been through in the past and the resulting long-lasting impacts.
Lomax (pictured) began the session asking a series of simple yet eye-opening questions related to undertaking typical daily life activities to help the audience understand what some people take for granted but can leave others in fear.
“How does it affect you if you always live in fear?” she asked, before highlighting that these situations had been woven into society for generations and by design.
“There are a few different ways with which you can address these long-term societal issues – be it sexism, racism, disablism, islamophobia, colonisalism, anti-semitism and so on,” Lomax said.
“There are lots of things we can do but we cannot ignore the history that explains how we got to a place where today we are not all starting at the same line.
“Imagine how it might feel – the diminishment of someone’s lived experience – if you walked up to them and just said, ‘ok we’re just going to level the playing field’. The ability to say that in and of itself is a privilege.”
‘It’s by design’
Being able to identify and understand that someone was in a position of privilege is the first step in addressing that situation.
“First you have to figure out what you don’t know,” Lomax said.
“Privileges are often invisible to those who have them. They are not only unearned advantages, but it’s by design – designed by laws, policies, practices, society and also within our workplace.
“How do we end up with institutions across society where senior leadership is not only male, but CIS white male, heterosexual, non-Jewish, non-Muslim, non-disabled white male?
“That’s not just happen chance, it’s by design.”
Within workplaces, it is important to identify who is given legitimacy, who belongs there and who is questioned.
“Thinking about colleagues and co-workers, who has the freedom to just breathe and be at any given moment?” Lomax added.
‘What am I missing?’
Workplace leaders should begin by asking themselves “What am I missing here?”, removing the lens of their identity and understanding how they can educate themselves better.
“So much of this is on learning,” Lomax continued. “Education is not the end all be all, if the education we are receiving is historically inaccurate or missing lots of things and the experiences of millions of people.”
“When we don’t understand a new concept or new thing, we’ll go to google and figure it out. But when it comes to all things inclusion all of a sudden the smartest of adults ask ‘What do I do?’”
Questions such as what are the ways sexism shows in the workplace? Or what are the ways black people are dehumanised in the workplace? can be the start of the learning process.
The manifestation of the criminalisation of black people can continue in the workplace without police involvement.
Examples such as increased security checks or by considering someone as aggressive when saying the same thing while someone else is considered passionate can all illustrate the in-built biases.
Lomax asked attendees to consider how they can educate themselves to ensure they are not perpetuating these systems in inter-personal behaviours and unlearn what they have been taught.
“You don’t just wake up one day and discover your privileges, this is a lifelong process,” she said.
“What you’ll begin to notice is many of these experiences are not homogenous at all.”
Addressing the question of ‘What about me?’ responses, Lomax said: “When privilege is invisible to those that have it, I expect the ‘What about me?’ argument, because you don’t realise the world has been designed for you.
‘It’s not about individuals, it’s the system’
Lomax concluded with the issue of relying on more people of minority groups getting into positions of power but not improving situations for others.
She noted that while visibility of under-represented groups could help, isolated representation alone would not solve the issue.
“Representation in roles of power is an important piece of addressing the issue, however you can absolutely have someone from these communities be in positions of power who perpetuates the status quo,” she said.
“If you’re in proximity to power, you don’t want to lose that power so you maintain the status quo, you protect that status quo, which is the issue with representations being the be all and end all to fix these things.”
Instead, the solutions came from re-writing the systems and structures within society.
“To get to a space where it’s not the end of the world where the one woman who makes it can ruin it for all women underneath her, is the idea that we have to redesign our policies, our practices, our laws, because that’s where these systems are perpetuated,” Lomax continued
“To make a place more equitable and inclusive, it’s not about the individual, it is about the system.
“If it was about the individual, when all the individuals passed away that created the system it would go away, but it’s so embedded and baked into the space, where one woman doesn’t have that big an impact, we have to look at why is only one woman there in the first place?
“That requires structural redesign, which is not easy.”
FCA: Fear holding back firms from building diverse and healthy culture
And the regulator urged the financial services industry to take effective action “quickly” so that it can reflect the people who use it.
FCA executive director of supervision – retail and authorisations Jonathan Davidson, explained how diverse, inclusive and purposeful businesses could create the healthiest workplace cultures.
“The specifics of your culture, like your strategy, remain up to you as leaders. But there is a growing consensus that healthy cultures are purposeful, diverse and inclusive,” Davidson told the Annual Culture and Conduct Forum for the Financial Services Industry.
“A culture where all employees feel a purpose beyond just making money while avoiding regulatory censure. A culture where a job is not just a job. A culture where all employees feel safe.
“Safe from retribution for speaking up. Safe from harassment and victimisation. In fact, an inclusive culture where all employees feel listened to and recognised for what makes them special.
“A healthy culture is one where diversity is the fertile soil in which innovation and improvement flourish.”
Davidson emphasised the importance of people being given freedom to speak and be included in businesses the culture will not last and that the sector needed to act urgently.
“Without safety, without inclusion, the value of diversity is lost and the diversity will eventually wither and die,” he said.
He added: “It’s clear that effective action needs to be taken quickly for financial services to become an industry that is truly reflective of the people it serves.”
Too often it can be fear that stops firms from building the right cultures and environments, and Davidson admitted this could include fear of regulatory action.
“I would summarise the most oft quoted barriers to having purposeful healthy cultures as having one clear common feature: fear,” he said.
“Fear of the short-term focus on profits, elevated in importance by financial key performance indicators and short-term horizons for reporting.
“Fear of taking the initiative to do the right thing and being blamed if it goes wrong – especially by the regulator.”
This can lead to the development of tick-box cultures, increased bureaucracy or situations where senior management do not trust or empower middle-managers and frontline staff.
Empower frontline staff
Encouragingly though, the FCA noted the upheaval generated by the coronavirus pandemic had empowered frontline staff and allowed them to take greater decision-making responsibility.
Davidson highlighted progress was being made with the regulator seeing the permafrost between senior management and the rest of business starting to melt as trust was being built.
However, there are people who still face tough situations.
“I confess that I did not foresee that faced by coronavirus the financial services would purposefully sweep away many of the big barriers to healthy cultures,” Davidson continued.
“But the experience of coronavirus hasn’t been the same for everyone and it hasn’t been positive for everyone.
“Some colleagues in the industry have continued to serve customers face to face. Many have had to endure increasing levels of hostility from stressed customers.
“Indeed, the Institute of Customer Service reported in July that customer-facing staff across a range of sectors have been subject to increasing levels of hostility, with more than half having experienced abuse from customers during the pandemic.”
Davidson said purposeful leadership was required to tackle the evolving challenges of the coronavirus and Brexit and maintain the healthy culture within businesses.
“For me, a key concept is that leaders are not only responsible for their own decisions but also for being proactive about the behaviour and competence of those they lead,” he said.
Davidson concluded his speech by confirming that with a restructuring ongoing at the FCA he was going to be leaving his post.
He will be taking up a position as senior adviser on financial services and the FCA’s purpose and approach to sustainability in preparation for the COP26 conference next year.