SimplyBiz adds mortgage adviser apprenticeship to development academy
The first cohort of mortgage adviser students will join the NMBA’s existing financial adviser and paraplanner apprenticeship schemes in the autumn.
The mortgage adviser apprenticeship programme will take apprentices fifteen months to complete and includes the London Institute of Banking and Finance (LIBF) CeMAP Qualification and training on additional soft skills required within the apprenticeship standard.
NMBA joint managing director Janice Laing said: “There is a serious need for new blood in the mortgage advice sector.
“The Association of Mortgage Intermediaries (AMI) estimates that the number of pure mortgage advisers dropped to around 12,000 in 2016, from approximately 30,000 ten years previously; a significant reduction in such a vital business area.
“The NMBA, The SimplyBiz Group and the wider industry are wholly committed to bringing new financial services professionals on board across the industry.”
Martin Reynolds, chief executive of SimplyBiz Mortgages and chairman of AMI, (pictured) added it was essential that a robust advice process remained at the heart of mortgage sales.
“The combination of technical skills and qualifications with vital soft skills included in the programme mean that these mortgage advisers of the future will enter the sector with all they need to trade compliantly and successfully,” he said.
All the photo highlights from the AMI Annual Dinner 2019
Here are the photo highlights from the night, which included strongly-worded and well-received speeches from AMI chairman Martin Reynolds and chief executive Robert Sinclair on the Mortgages Market Study (MMS).
Attendees also raised £4,956 for mental health charity Mind.
AMI chairman slams FCA for ‘misleading’ statistic and less than robust analysis
The regulator was heavily criticised by Association of Mortgage Intermediaries (AMI) bosses last night at the trade body’s annual dinner for its “worrying” fixation on price and for appearing to have “pre-determined” outcomes with consultations being little more than a “process tick-box exercise” with “no robust impact analysis”.
AMI chairman Martin Reynolds highlighted that the volume of papers issued by the FCA was “unhelpful” and “does nothing to help firms plan and develop for the betterment of their clients”.
Reynolds pointed out 11 papers from the FCA in the last four months along with others from the Financial Ombudsman Service and Financial Services Compensation Scheme.
“I would ask, are all of these really in the best interests of the consumers?” he said.
“The challenge is they appear to be issued in silos with some having little or no robust impact analysis included.”
Not true consultations
Reynolds noted that AMI had a positive relationship with many sectors within the FCA, but felt the regulator had become more closed-minded and less willing to listen to the industry.
“We do feel the FCA is changing, it does feel less consultative at times than previously and we feel there could be better consumer outcomes if it approached consultations in a more open-minded way, rather than what appears to be a pre-determined outcome approach,” Reynolds continued.
“In our view this is not true consultation but more of a process tick-box exercise.”
Speaking specifically about the FCA’s MMS, Reynolds also hit back at the regulator’s approach and criticised it for using “misleading” figures to justify its position.
“I will say that the continued fixation on price over best advice is worrying. The continual use of the statistic that 30 per cent of customers could have had a cheaper product is misleading,” he said.
“While price is a determinant in any advice process, it’s not the only one.
“I would welcome feedback from the regulator in relation to [its] research on how many of those 30 per cent actually received the best advice while not the cheapest product. Surely that is the full outcome from any advice process.”
He added: “I will make no apologies for keeping this issue on the agenda – good advice should be at the heart of all discussions with consumers.
“The rush to use price as sole determiner and the potential extension to the execution-only rule is wrong and it could have long-term repercussions with customers losing valuable protections.”
Mortgage Solutions has contacted the FCA for a response.
AToM becomes directly authorised
The firm said it had made the decision to apply for FCA authorisation under one of its subsidiary companies, AToM Express Limited, to increase the services available to clients and improve efficiency.
It completed the process using the support of SimplyBiz Mortgages.
AToM managing director Dale Janiels (pictured) was pleased the firm had taken the opportunity and thanked SimplyBiz for its support.
“They made sure that they were happy with everything before the full application was submitted to the FCA,” he said.
“This saved us a lot of hassle and time and meant that the application period was very short.”
SimplyBiz Mortgages CEO Martin Reynolds added that he was delighted to be working more closely with the AToM team and was looking forward to a long and successful partnership.
‘Only 30% of cases are packaged correctly at submission’ – Marketwatch
Some estimates put the gap between the number of DIPs going through to full completion at as much as 50-60%.
We asked this week’s Marketwatch panel why more DIPs don’t go through to completion and what could be done to close the gap.
Martin Reynolds, chief executive of SimplyBiz Mortgages
Whilst the 50% DIP to completion figure may seem low, it could be misleading, and therefore understanding how to improve this for all in the chain needs more granular detail.
There are many dynamics in the process, so we need to understand where the biggest gap is – is it DIP to application, application to offer, or offer to completion?
Much work has been carried out between brokers, distributors and lenders in relation to the application to offer stage.
Ensuring correct documentation at the correct time is key. Many lenders now allow this to be uploaded to the application, negating lost documents.
We offer members a section on our website under ‘Speed to Offer’ that helps them navigate the plethora of lenders’ documentation nuances.
There is still the challenge of broken chains and down valuations, but I believe that the percentages are very high in this area.
DIP to application is still work in progress. Point one is understanding the lender’s criteria.
We’re making steady headway with the introduction of new systems like Knowledge Bank and CriteriaHub helping brokers to choose the correct lenders.
Lenders can still play a bigger part in this by having clear, easy to find criteria outlined on their websites.
The final point is around lenders engaging in a positive way with brokers where there is an ‘accept’ decision, but no application follows.
There could be many reasons but, by being consultative, they may be able to help improve the understanding and make positive changes to help all.
Hannah Bernard, head of Barclays Mortgages
As a lender we are constantly looking at ways to improve customer engagement, whether direct or through intermediary partners, and streamline the mortgage journey.
The application process is a vital link in this chain and from the first touch-point – the decision in principle (DIP) – through to completion; there remain significant improvements to be made.
Internal research from Barclay’s shows that 25% of DIPs received don’t lead to a full application, and only 60% convert to completion.
One of the main reasons for this is the difference in quality in terms of how cases are packaged and by whom.
There is currently a 13-day variance in the time to offer between different brokers, with the best in class coming in at eight days and slowest at 21 days.
So how can these times be improved?
The industry is already working hard to reduce physical valuations using data driven automation but more could be done to refine valuation methods and speed up this journey.
Only 30% of cases are fully packaged correctly at submission with the top three packaging defects being a lack of bank statements with salary credit shown, the latest payslips, and signed trading accounts.
Moving forward, technology can certainly help improve the application process but, no matter how sophisticated lenders systems are, the key to a smoother passage is ensuring that all initial data sent by intermediaries is correct, with all the required documents correctly packaged and sent in one go.
However, with intermediaries having to adhere to different policies and working with several lenders at a time this isn’t always easy.
This means lenders also have to be held accountable for making criteria and systems as simple to use as possible, and we must work harder to educate and support intermediary firms of all shapes and sizes to help them get the application process right first time.
We have already implemented a number of policy changes this year to make it easier for intermediary partners to do business with us.
And, with plans to remove requests for over 180,000 pieces of documentation in the coming year, we realise this is an ongoing challenge for all lenders.
Colin Payne, associate director at Chapelgate Private Finance
Whether a DIP progresses to completion is likely to depend on what stage of the homebuying process it is carried out.
Some brokers may well be too quick off the mark to DIP clients, when in reality they may not be in a position to buy for a number of months.
So much can happen in that time frame and the chances of that DIP then being converted to a full application is remote.
The subject of when to proceed with a DIP is an interesting one; do you undertake a DIP for all clients or are you more selective?
Without a doubt I am in the latter camp and can honestly say I rarely obtain an DIP until a client has had an offer agreed on a property and they are ready to move forward.
I accept that a good proportion of my clients are young or established professionals with an excellent credit record and reasonable deposit to boot.
For these reasons, I have numerous lenders that would wish to lend.
Therefore, I don’t see a requirement to undertake an DIP with ‘lender A’ to then only choose ‘lender B’ further down the road when the client has found a property and is ready to proceed.
On the other hand, if I am concerned about a client’s credit record, or I may have very few lender options due to a client’s circumstances then from time to time, I will obtain an DIP at the earliest opportunity to give both the client and myself some peace of mind.
From a lenders’ viewpoint, they’re in a fairly difficult position.
More are now only leaving a soft footprint on a credit file, which is to be applauded, but they are susceptible to brokers taking the attitude that they can DIP all clients as a way of ‘tying them in’ when starting that relationship.
I prefer to explain to clients why I feel the need to undertake a DIP – or not – and feel all are receptive to my judgement. To date, it has rarely let me down.
Brokers expect more growth in limited company buy to let – SimplyBiz
Research from SimplyBiz Mortgages has showed that more traditional buy-to-let lending could be set to fall this year.
Martin Reynolds, chief executive of SimplyBiz Mortgages (pictured), said: “Information received directly from the firms we serve is absolutely invaluable in terms of letting us see trends in the direction of the market, and giving us insight into the reasons why we might see changes from not only brokers but also consumers.
“Changes in the 2015 Autumn Statement clearly made the market less attractive to most portfolio landlords in terms of stamp duty and certain aspects of taxation, and we expected to see a rise in the number of limited company buy-to-let cases as a result.
“However, the fact that the majority of brokers expect to see this rise continue throughout 2018 gives us an indication that increasing numbers of landlord clients are selecting limited company BTL.
“I would, however, add the cautionary note that the taxation issues surrounding this type of business are complex, and it can’t immediately be assumed that limited company BTL will be the most tax efficient route for all clients.
“As the majority of brokers writing the business are not tax specialists, I would advise them to guide their clients to get a qualified opinion to ascertain the best long-term option for an individual client’s circumstances and financial plan.”
Mortgage adviser at Capricorn Financial Consultancy, Alexander Smith, told Mortgage Solutions: “I think people with, or aspiring to have, a large portfolio of property will naturally gravitate towards a Ltd company structure and the research broadly followed what we have seen over the past 12 – 18 months.
“For the smaller landlord personal ownership of the asset is often more cost effective but activity in this sector has declined over the same period due to higher entry costs, not only with regards to the additional 3% stamp duty, but also due to the higher stress rates employed by lenders, which make borrowing above 60% a struggle unless you’re able to include sufficient personal income.”
FSCS funding changes just ‘a starting point’ – AMI
The changes to the FSCS funding arrangements were announced last month and will see several reclassifications of intermediaries, with insurers and providers contributing 25% of the fees in some classes.
Speaking at the trade body’s annual dinner last night, AMI chairman Martin Reynolds welcomed the move, saying: “The key point is that this is acknowledged as a starting point and not necessarily a final resting point.
“From April 2019 mortgage brokers will no longer have to pay for mistakes in pensions and investment businesses.
“AMI believes that this is a significant win for mortgage brokers moving forward and a common sense outcome from the regulator,” he added.
AMI chief executive Robert Sinclair (pictured) added that he believed the changes would save brokers around £30m per year from April.
However, AMI leaders also highlighted significant concerns with the Financial Conduct Authority’s (FCA’s) Mortgage Market Study interim report, particularly an over-emphasis on price rather than service and customer outcomes.
“Can you think of another industry where 70% of consumers end up with the appropriate best priced product?” asked Sinclair.
“I think that’s astonishingly good. But we’re about to try to break that up because they want to change the way we operate – they want to talk about the way that prices differ.
“They also want to build an eligibility tool which includes criteria, sourcing and affordability to allow consumers to go all the way through the journey to perhaps a very shortlist of products and then perhaps the choice to self-select on an execution only basis.”
Sinclair highlighted that frequently consumers start with an idea of what they wanted but after discussing their situation with a broker this would identify what they needed.
“So I would council caution about breaking up a market where 70% is right to help satisfy the 30% who might be disadvantaged,” he added.
Wrapped around advice
Reynolds echoed many of these fears, saying: “AMI would urge caution on the regulator to not use the outcomes of the study to unpick the benefits to the consumer that the Mortgage Market Review (MMR) gave.
“Advice should be at the heart of the mortgage and protection process ensuring that people can not only afford the property but that they are also adequately protected so they can remain in the property for the long term.”
He added: “We fully understand that we need to invest in technology to improve the customer journey, but we need that technology to be wrapped around the advice process and not used instead of the advice process.”
He also urged the regulator to take greater interest in the phoenixing of firms and continued regulation of individuals that have caused consumer recourse via the FSCS.
“These are key areas that we need to be addressed if we are to provide confidence to the consumer in our fantastic industry,” he said.
SimplyBiz Mortgages adds InterBay Commercial to lender panel
The lender’s commercial, semi-commercial lending, buy-to-let and HMO, and bridging loans are available to club members.
The commercial specialist said lending highlights include higher LTVs and extended loan terms, lending on vacant property and loans offered at investment value.
Martin Reynolds, chief executive officer at SimplyBiz Mortgages, said: “We are very pleased to welcome another part of the One Savings Bank Group to our panel, having held long established relationships with other parts of the group for a number of years.”
Adrian Moloney, sales director, OneSavings Bank, added: “Members will also be able to take advantage of our new streamlined process with regards to our competitive bridging solutions which will enable them to respond faster to their clients’ needs.”
Simplybiz achieved flotation on the London Stock Exchange’s Alternative Investment Market on 4 April this month giving the group a capitalization of £130m.
The firm currently supports over 3,400 directly authorised financial advisory firms in the UK.
Announcing the plan to float, joint chief executive Matt Timmins said the initial public offering would “mark the next stage in our growth story”.
According to its admission document, SimplyBiz is floating to “enhance the profile of the business, assist in incentivising management and employees, to provide permanent capital from institutional investors, to enable the directors to take long term investment decisions and to provide Ken Davy, the group’s chairman and current majority owner, and the other selling shareholders the opportunity to sell down all or part of their respective holdings.”
Fleet changes policy, Masthaven partners up, Simplybiz launches insurance service – roundup
Specialist lender Fleet Mortgages has dropped its floating charge on limited company BTL cases for both purchasing and remortgaging, and said the move will simplify cases when it comes to limited company lending where the client holds mortgaged properties with multiple lenders.
The announcement comes as the intermediary-only lender recently announced that one-third of its mortgage applications are now made via limited companies.
Bob Young (pictured), chief executive officer of Fleet Mortgages, commented: “We felt it was important to make the process as simple and transparent as possible for those purchasing or refinancing with us through a limited company structure.
“This is why we have made the announcement that we will be dropping the requirement to have a floating charge on such cases.
“As far as advisers are concerned this will make the whole process with limited company cases that much simpler.”
Masthaven Bank has joined up with distributor Intrinsic to offer its advisers access to Masthaven’s residential mortgage range, after launching as a retail bank in 2016 from its origins as a bridging lender.
Intrinsic has around 3,500 financial advisers in its network, with 1,500 focused solely on mortgages.
The move will support the lender’s growth, said Matt Andrews, managing director of mortgages at Masthaven.
Andrews commented: “Masthaven’s mission is to make the specialist market more accessible for brokers and customers alike, and expanding distribution is vital to that effort.
“Customers that don’t fit the high street cookie cutter approach to underwriting absolutely need support from the right adviser, and Intrinsic is perfectly placed to deliver on that demand.”
Simplybiz Mortgages has launched a portfolio insurance review service for its members in conjunction with Uinsure.
Once Simplybiz members send an email to a dedicated address containing their client’s BTL portfolio and current insurance renewal dates, one of Uinsure’s regional development managers will contact them to outline general insurance (GI) options available to them.
Uinsure will then provide individual quotes for its BTL policy, or send the enquiry through to the insurer’s specialist commercial referral team for portfolio insurance options.
Martin Reynolds, chief executive officer of Simplybiz Mortgages, commented: “Launching the portfolio review proposition will allow members to ensure that they are providing a full service, including landlords’ insurance.
“Even if GI is not at the core of a member’s business the referral option still provides a positive opportunity.”
Mark Hutchings, head of sales and distribution at Uinsure added: “Last year’s Prudential Regulation Authority changes to affordability checks, which affected portfolio landlords, may have increased the administration work required when arranging BTL mortgage.
“But requiring landlords to collate information about all properties in a portfolio provides an opportunity for brokers to review the insurance needs of landlords.”
Northview, Simplybiz, and Aldermore appoint senior roles – round-up
The Northview Group, whose brands include the Kensington, New Street, and Acenden, has appointed Mark Arnold to the role of the group’s chief executive officer.
Arnold will take on the role on 10 April 2018, and will replace Amany Attia, who announced her retirement in June 2017.
Previously, Arnold was executive in residence at private equity firm Centerbridge Partners, and had spent 18 years with GE Capital in a variety of senior management level roles.
Tim Breedon, executive chairman at the Northview Group, commented: “Mark’s broad experience will be key to supporting our strategy of continued mortgage lending growth, which through brands like Kensington Mortgages has been supporting underserved customers for over 23 years.
“We look forward to welcoming Mark on board in April.”
Arnold added: “Northview Group brands have built a great reputation in the specialist lending market over many years. The group has had a fantastic year and I am confident that my experience from around the globe will further support the ambitious growth plans that we have.”
Makayla Everitt (pictured) has been promoted to a newly created position of head of mortgages at Simplybiz.
Everitt joined Simplybiz in May 2012 as head of business development after a previous role at Natwest.
She is responsible for the growth and strategic direction of the business and will continue to report to the Martin Reynolds, chief executive officer of Simplybiz Mortgages.
Reynolds commented: “Makayala has been with the business for nearly six years and during this time she has been instrumental in the growth of its proposition.
“Her focus on enhancing our members’ business opportunities whilst keeping them and their clients protected with our compliance proposition has been well received.”
Aldermore has appointed Sue Hayes to the newly created position of group managing director, retail finance.
Hayes joined in June, and will now be responsible to managing the bank’s existing mortgages and savings businesses, as well as looking for expansion into new areas.
She was previously managing director of premier and community segments and savings products at Barclays. Prior to the Barclays role, Hayes worked at Santander, RBS, and Halifax Bank of Scotland, where she held various senior roles across retail and commercial banking.
Phillip Monks, chief executive officer of Aldermore, said: “Aldermore has established itself as a key supporter of professional landlords and homeowners that do not fit the cookie cutter approach of many providers, with our award-winning savings proposition offering competitive rates over the long term.
“Going forward, we aim to broaden our offering, further helping individuals to achieve their goals, and Sue’s experience and knowledge will play a key role in our future development.
“The business is well positioned in providing mortgages to customers who are overlooked by mainstream lenders, such as the self-employed, contractors or independent workers, who are an increasing part of the UK working population.”