LLLE: FCA review highlights ‘tunnel visioned’ equity release advice

LLLE: FCA review highlights ‘tunnel visioned’ equity release advice

 

Speaking at the Later Life Lending Event, Wilson (pictured) warned advisers to take on board the Financial Conduct Authority’s (FCA) recommendations because they would be back.

“They might be in the community now asking questions, talking to customers, doing mystery shopping,” he said.

However, Wilson welcomed the FCA’s insight and agreed the regulator was right to be looking at the sector, but argued that 99 per cent of advisers in it were passionate about consumer outcomes.

“Does that mean all the practices are right? No, because you often don’t know what you don’t know,” he said.

“I think the FCA’s point is you’re only as strong as your weakest link. There are practices out there through lack of knowledge, lack of experience, lack of training which might well have been exposed by the Dear CEO letter and work the FCA has done.”

Wilson said he believed tight regulation would encourage new entrants and confidence in the market, but adjustments needed to be made.

“Do we need some tweaks, yes we do, without a shadow of doubt there’s varying standards. We need to be more reflective around record keeping and need to be more holistic,” he continued.

“This cannot be a product sold in silos and I think that’s one of the elements that seems to be a core thing with the regulatory work at the moment – that we are too tunnel visioned.

“We need to broaden that vision out to encompass all relevant products, factor those into a good quality conversation with the customer and guide them to the right solution.”

And he concluded by urging advisers in the market to get on board with the situation and learn and improve before the FCA was forced to act.

“It’s vital we educate ourselves and ultimately we do the work for the regulator to be robust, because otherwise they will come in and impose rules on us and that generally is a one size fits all which causes some pain and grief,” he added.

 

Engage with advisers

SimplyBiz Mortgages head of strategic development Richard Merrett agreed that closer regulation would give more confidence to consumers and advisers.

But he called for greater engagement with advisers, distributors and trade bodies “to ensure the findings are a fair reflection of the market”.

“The key take away is around the process and that the fact find should not be a tick box and they were keen to find the client’s voice in the fact find and suitability report,” he said.

“That should not be exclusive to the later life market and equity release, that should form part of standard advice process, irrespective of the area of the market someone works in.”

 

You can register to watch the virtual Later Life Lending Online Event here: https://www.mortgagesolutions.co.uk/events/later-life-lending-event/venues/register-online/

Presentations will be available to watch for 30 days.

 

LLLE: Equity release qualifications are ‘not fit for purpose’

LLLE: Equity release qualifications are ‘not fit for purpose’

 

It was also noted that the present framework often conflicted with the real world and there was a need for the qualification to be updated to focus on clients’ current situations and future planning.

Speaking during the adviser panel, AiR Group CEO Stuart Wilson said there was a lot to be done, but credited the Equity Release Council, London Institute of Banking and Finance and Chartered Insurance Institute with already starting work on the process.

“We need to move to a more broad understanding and reflect the Financial Conduct Authority (FCA) work,” he said.

This, Wilson emphasised, meant the need for a “holistic understanding” of the customer which he believes has already begun in the sector.

“Later-life lending is a subject but then wrapped around that we have to have a layer of qualifications around later life advice,” Wilson continued.

He highlighted that awareness of care, estate planning, and tax and benefits were all necessary now.

“All of those ancillary subjects need to be composite parts of a good exam structure and qualification framework.”

 

‘In conflict with real world’

SimplyBiz Mortgages head of strategic development Richard Merrett was also forthright in where the system needed to improve.

“I think the qualification framework in its current format is often in conflict with what happens in the real world when engaging clients and giving advice,” he said.

“There’s far too great a focus on the past and products that are no longer sold.”

Merrett continued: “As Stuart highlighted [there is] absolutely not enough on current and future needs and there needs to be greater emphasis on the holistic piece – assessing future needs, long-term care, inheritance tax (IHT) – so they do need an overhaul.

“That will require a coming together of different people in the market and a coming together of the different trade bodies.”

 

You can register to watch the virtual Later Life Lending Online Event here: https://www.mortgagesolutions.co.uk/events/later-life-lending-event/venues/register-online/

Presentations will be available to watch for 30 days.

 

Return to normal market in April may allow more rate competition – Murphy

Return to normal market in April may allow more rate competition – Murphy

 

A drop off in activity in the second quarter of 2021 should not be feared and may benefit lenders, brokers and borrowers, according to JLM Mortgage Services head of mortgage finance Sebastian Murphy.

Speaking on Mortgage Solutions Television in association with Accord, Murphy said: “I think most lenders and ourselves would welcome the market returning to a more normal market.

“We don’t see the market falling off the edge of a cliff.

“We just see a return to perhaps a bit more of a normal market and that might allow a bit more competition for rates and that could be a good thing for consumers, so it’s not anything to fear.”

Murphy added that he expected the market to remain strong post-March 31.

“The stamp duty holiday coming to an end is a very minor part of what’s happened to the market. A lot of it is natural migration where people want to move and need to move,” he added.

 

 

This was echoed by Accord director of intermediary distribution Jeremy Duncombe who added that the underlying housing market was fundamentally strong.

But he warned there could be capacity challenges ahead until then and that would need careful monitoring for brokers and their clients.

“I am expecting a capacity challenge for particularly the legal profession, the conveyancers and lenders as well,” Duncombe said.

“So that will impact brokers and I think some of those managing messages need to start now.”

SimplyBiz head of strategic development Richard Merrett agreed about the issue of capacity within the market getting worse.

And he added that brokers should be preparing their businesses for as many eventualities as possible, including cherishing clients.

“Diversify your business as best you can, so you aren’t just a home for purchase and remortgage – and if that means you don’t have the capacity to do it yourself then know when to refer it on,” he added.

 

 

‘Now, more than ever, consumers want advice’ – Merrett

‘Now, more than ever, consumers want advice’ – Merrett

 

Speaking on Mortgage Solutions Television in association with Accord Mortgages, the distributor noted advisers would need to continue adapting and adopting new technologies to maintain good customer relations.

SimplyBiz head of strategic development Richard Merrett said: “The key point, yes there’s embracing technology, but now more than ever, the consumer wants to speak to someone and be able to get advice – that’s absolutely crucial.

“It’s about good advisory firms utilising the tools they now have and layering them into a good advice business.”

He added that brokers would need to keep in contact with clients over the winter and spring.

“What we’ll see now is a bit more adoption of marketing-based tools, so, helping brokers stay in touch with clients,” Merrett continued.

“That’s going to be absolutely crucial going into the next six months of lockdown – being on top of all your clients, being able to speak to them and being able to service them.”

 

 

JLM Mortgage Services’ head of mortgage finance Sebastian Murphy agreed that advisers needed to make themselves more efficient and technology could help with that.

“With the volumes you’ve got, if you don’t change as brokers and start using those tools, you’re going to get left behind,” he said.

“You’re going to find your colleagues down the road using affordability and criteria tools will be far ahead of you in terms of choices, of lender spread and will be offering a much more professional service.”

And Accord director of intermediary distribution Jeremy Duncombe echoed that the threat of robo-advice had faded sharply.

“The last six months has shown there’s so much complexity out there that people want to have that conversation, but they don’t mind if that conversation is over video, face-to-face or on the telephone,” he said.

“So the value of advice has grown over the last six months and the value of an adviser is probably more important than ever.”

 

 

Advisers self-serving queries mean lenders can stay at 90 per cent LTV lending longer – Duncombe

Advisers self-serving queries mean lenders can stay at 90 per cent LTV lending longer – Duncombe

 

Packaging cases right first time was mostly seen as a benefit to lenders, but there was now a realisation this could help brokers and borrowers benefit significantly, a panel discussed on Mortgage Solutions Television in association with Accord Mortgages.

Jeremy Duncombe, director of intermediary distribution at Accord, highlighted the current situation.

He emphasised that spending an extra 20 mins packaging a case up, speaking to your business development manager (BDM), or waiting for the next item in the post to get everything up front can save hours or even days.

“And with service levels being as they are across the industry, saving that three or four hours later on is a better investment in time by spending 20 minutes up front,” Duncombe said.

He added that a lot of calls and traffic coming into the lender could probably be self-served which would save advisers time and create more capacity to underwrite cases.

“And if we really put it in simple terms, the less time we spend answering calls that can be self-serviced, we can stay out longer for example in 90 per cent LTV lending,” Duncombe concluded.

 

 

Forge relationships with BDMs

JLM Mortgage Services head of mortgage finance Sebastian Murphy agreed brokers should be “forging good relations with their BDMs and almost getting cases pre-agreed verbally before they submit”.

“This would without a doubt speed up the process but also stop them putting cases to lenders which have now changed criteria and won’t do that type of lending anymore,” he added.

Meanwhile, SimplyBiz head of strategic development Richard Merrett noted: “Where lenders can help is being as clear as they possibly can, not just in separate packaging guides but pointing out to a broker what is going to be needed in every single case.”

This could include radio buttons or warnings on submission to ensure advisers had included the most important documents.

 

Accord’s Duncombe: ‘The last three months have been our busiest ever’

Accord’s Duncombe: ‘The last three months have been our busiest ever’

Jeremy Duncombe, Accord’s director of intermediary distribution said: “This is a position we weren’t expecting to be in, in March this year. So, all lenders are trying to react in terms of capacity and how we provide service.”

He explained the lender has been balancing capacity and demand and received too much business to continue to lend within its chosen range, so it has had to limit both its LTV and criteria.

He added that all its staff have been working from home, with many initially having to look after children and some being redeployed into different parts of the business, including collections and recovery.

Richard Merrett, head of strategic development at Simplybiz said the industry has to be thankful it is still operational and not suffering like travel or tourism, for example.

“The fact we have too much to do is a bit of a champagne problem,” he added.

“But, it is very challenging. People doing this job for a long time are having to relearn what they’ve known in the past because of the swaths of changes to products and criteria and then set against the backdrop where they can’t get the same level of service or support. Very tough working conditions,” but added this should really be viewed as a positive again, given some of the situations people are struggling with.

Sebastian Murphy, head of mortgage finance, JLM Mortgage Services said: “I think what most brokers may be struggling with is the contrast between the different lenders. Some lenders have got it right and are doing really well. Others are really struggling and regrettably the end of March can’t come quick enough for a few of them.”

See below to watch the video, hosted by Owain Thomas, features and contributing editor, Mortgage Solutions.

 

Richard Merrett joins SimplyBiz Mortgages

Richard Merrett joins SimplyBiz Mortgages

 

Merrett was appointed managing director of Largemortgageloans.com in 2017, and prior he was at Alexander Hall for 15 years as its technical director. 

He will have responsibility for helping to shape and create the future direction of the mortgage club, working alongside the senior management teams, in the new role. 

His appointment follows the addition of two new lender account manager roles earlier this year, filled by Marc Gordon and Daniel Wraith, plus additional help desk support.  

The new roles were introduced in order to support the growth plans of the club and in an effort to deliver “excellent service” to its members.   

Martin Reynolds, chief executive of SimplyBiz Mortgages, said: “We are delighted that someone of Richard’s calibre has chosen to join us as we expand our business to help better serve our members and lender partners.  

“Richard has a wealth of experience within the industry – at both management and business writer level – that I believe will be important as we develop our business model.” 

He added: “We have invested in a number of new key personnel during 2019, with more to follow in 2020, to ensure that SimplyBiz Mortgages continues to lead the way with its club and compliance proposition.”  

Merrett (pictured) said: “I am thrilled to be joining SimplyBiz Mortgages and to help develop its excellent proposition even further.  

“I look forward to working closely with our member firms and lender partners to help shape the future of the club.” 

Product transfer masterclass at next month’s TMPE

Product transfer masterclass at next month’s TMPE

 

Richard Merrett (pictured), managing director of largemortgageloans.com, will hold a seminar on the topic, discussing how advisers can ensure the best outcome for customers and what they need to do to appropriate and transact them efficiently. 

 

TMPE will take place from 6 to 13 November, and the programme also includes: 

Protection: a new perspective 

This question and answer session aims to change the way advisers look at protection, and explore an alternative protection sales process that will allow advisers to tailor protection advice to every customer’s needs, every time. 

Q&A chaired by Kevin Roberts, director of Legal & General Mortgage Club 

Mark Graves, CEO, Auxilium Partnership 

Gareth Herbert, sales director, Mortgage Advice Bureau 

Martin Reynolds, chief executive, SimplyBiz Mortgages 

 

Lender panel 

Jonathan Buckle, national account manager, Lloyds Banking Group 

Andy Ingham, corporate account manager, NatWest Intermediary Solutions 

Jonathan Stinton, corporate relationship manager, Coventry for Intermediaries 

John Trusswell, head of intermediary mortgages, Newcastle Building Society 

 

Venue and dates:

The Mortgage and Protection Event will take place at: 

6 November – Etihad Stadium, Manchester 

7 November – Cranmore Park, Birmingham 

12 November – Allianz Park, London 

13 November – St. Mary’s Stadium, Southampton 

For more information visit: 

https://www.mortgagesolutions.co.uk/events/mortgage-protection-event/?pfat=39c68792ef044ee286cb61726f7e2ed3 

Largemortgageloans.com expects to exceed lending target of £500m in 2019

Largemortgageloans.com expects to exceed lending target of £500m in 2019

 

A spokesperson from largemortgageloans.com told Mortgage Solutions that last year the company exceeded its lending target of £420m, while its average loan size so far this year is more than £750,000.

The increase in staff and growth in lending completions are part of the firm’s expansion plans, including a move to new offices in London’s Docklands.

Largemortgageloans.com advises clients globally on complex financing of asset classes.

This can include bridging loans, commercial and development finance, complex income structures and later life lending including equity release.

Managing director Richard Merrett (pictured) said that in the last 12 months the specialist mortgage broker has increased written business by 53 per cent, banked business by 31 per cent and reported a 38 per cent rise in the volume of mortgage applications.

Merrett added: “Society is changing. We are living longer, more people than ever before are self-employed and we have a huge number of clients who are ex pats, UK based foreign nationals, commercial developers or buy to let landlords.

“We have 200 finance providers globally, from well-known high street names to private investors, challenger banks, boutique lenders and specialist private banks. Our team of experts finds solutions where others fail, and our continued success is testament to that.”

 

Richard Merrett to join Largemortgageloans.com as MD – exclusive

Richard Merrett to join Largemortgageloans.com as MD – exclusive

Merrett (pictured) joins the firm after a 15-year career at the London-based and Foxtons-owned broker Alexander Hall as a board member and a brief spanning key lender relationship manager, product development and adviser training and communications.

Paul Welch, CEO and founder of Largmortgageloans.com said: “Richard has an excellent reputation and great experience in mortgage intermediary distribution. We have exciting plans to grow all aspects of the business and Richard’s knowledge and experience will enable us to push on with our strategic growth.”

Merrett was central to the development of Alexander Hall Associates as a leading mortgage intermediary in the UK and was a key member of the management team that positioned the business to support the successful IPO of the holding company, Foxtons Group, in 2013.

Welch added: “Largemortgageloans.com is still actively recruiting advisers interested in developing their careers in the specialist large mortgage market, both in the residential and commercial markets.”

Richard Merrett said: “I’ve had 15 fantastic years at Alexander Hall, it’s a great business and I wish them every continued success. The chance at Largemortgageloans.com to drive the business change over the next few years is extremely exciting and I am very much looking forward to the challenge.”

Founded in 2006 by Paul Welch, Largemortgageloans.com has targeted high-net worth individuals since launch and has lending partnerships with 84 finance providers.