As a result, brokers often meet borrowers at pivotal points in their financial planning, throwing up the opportunity to be more than a mortgage adviser.
We asked this week’s Marketwatch panel if it makes sense for brokers to broaden their services beyond mortgages to create a better relationship with clients and ultimately a stronger business.
Right now, mortgage brokers are in an incredibly strong position, but we can never be complacent.
Key to this is preparing business to ensure we remain relevant to clients in the future.
We are living in an increasingly digital world, with new competitors who want to challenge and disrupt our profession’s traditional flow of mortgage advice.
Leads are a good example.
The lifeblood of many advisory firms, most are generated from recommendations and referrals.
But this lead source could be increasingly challenged long-term by digital businesses using big data to identify ‘ready-to-buy’ customers before you do.
However, many brokers have the solution to hand in the shape of their client bank.
By staying in touch with clients and offering a broad range of services, brokers will naturally be seen as the first port of call for financial advice.
Understanding your back book and data will also help with new obligations under the GDPR.
Make the data you hold work for you, because this can be crucial in building long-term client relationships.
This includes deploying technology where possible in order to work more efficiently.
Brokers have become the dominant force in mortgage distribution by being customer-focused and entrepreneurial.
Let’s make sure it stays that way.
Be the first port of call for all areas of financial advice, and the first person customers think of when something in their lives triggers the need for a financial conversation.
By being proactive and remaining relevant, brokers will be in the strongest possible position to look after their clients and so successful long-term.
David Copland, director at TMA club
Over the last 20 years, we have seen a huge shift in the professionalism and quality of the mortgage broker.
The mortgage market has become very specialist and the knowledge and skill that the broker brings to a client is at its highest.
Gone are the days where a financial adviser can on their own provide holistic advice and be an expert in investments, pensions, protection, mortgages and second charges.
Usually – and increasingly – they will specialise in one or two areas and turn to others either in their firm to help in other areas, or, refer to another broker whose expertise lies elsewhere.
This means that the client is getting the best advice from specialised experts.
At TMA, we have certainly seen increased collaboration between colleagues and other brokers who may have differing skills and expertise – who collaborate to deliver a well-rounded proposition to the client.
This knowledge base and focus can also be altered to reflect trends and changing client needs.
Equity release is one such proposition that has recently leapt in interest.
Up until recently, many brokers have chosen to refer these clients on to a third party.
However, as this market continues to grow and the over 55’s become a more significant part of the UK population, brokers should consider adding this skill set to their proposition.
I would also advocate that mortgage brokers start giving advice on second charges.
In my opinion, a charge on a property is a charge on a property whether it is first charge, a second charge or a third charge.
This helps streamline processes and makes for a better overall skillset.
I am a firm believer that holistic advice is key to our clients.
While reviewing the mortgage may well be the primary reason we meet our clients, other products should always be discussed.
My view has always been that our first job is to ensure our clients are armed with all of the required information to make the right decisions.
This not only applies to the mortgage but just as importantly on additional products, such as protection, which in the past some of our industry colleagues treated as an afterthought.
Providing holistic advice takes time and may also involve having a difficult conversation with clients, who may have had a negative experience with an insurance product or a past adviser.
I am still shocked at the amount of clients we see whose previous advisers failed to adequately protect.
Our interests are totally aligned with our clients, so even if there are products we do not provide, we ensure that we have a trusted partner that does – such as pension advice or estate planning, both of which should be reviewed on a regular basis.
In the current climate, with impersonal call centres, that personal service really counts.
Our clients value the amount of time that we spend with them, discussing their options, knowing that whatever decisions they make, are fully informed.
That does not mean that we should all be investment specialists; our advisers are rightly proud of being mortgage experts.
Key relationships, with good firms that offer products, that we don’t specialise in, but where our clients experience the same, high quality, personal service is vital to our business and our client’s needs.