For now, this is one of the few instances in which a specified broker is explicitly recommended to a customer searching mortgage products on a comparison website.
This week, Mortgage Solutions asked: Is there anything comparison sites could do to work seamlessly with brokers?
One of my bugbears in this industry is that we talk about mortgage sales, but when we look at comparison sites the ultimate focus is on the product and pay rate. Those two things, I challenge.
Firstly, it’s an advice process and secondly, product is key but criteria and qualifying for a mortgage are equally – if not more important – than the ultimate product selection.
Where comparison sites win is with simple transactions like car insurance. With mortgages, we see best buy tables and it’s really frustrating to be approached by someone who says: “I’ve just seen this best buy table rate of 1.39 per cent, I’ve spoken with that bank and they can’t help me. But that’s what I want, and I want you to find it from a different bank. That’s the rate I’m willing to pay.”
Then you’ve got an uphill job as an intermediary. I don’t sell a mortgage; I sell my services.
It’s the consumer-driven process of “everywhere I go, I go online. I want a mortgage, I go online”.
It is an education issue; there’s a real gap between how the wider public is educated and unfortunately this information is mostly being fed by websites. It’s going in the direction where everything can be done quickly and instantly.
Comparisons sites should say: “here are some rates for your information, if you want to go any further you should speak to a qualified person”. That would make it a more honest service. Anything else can be misleading as even with varying completion dates, it’s hard to compare based solely on rates.
The main thing about comparison sites is that they tend to keep the amount of detail entered to search for products as low as possible in order to encourage people to use their website.
The information taken tends to be very simple and basic and therefore does not take in to account any of the lender’s criteria or the client’s circumstances.
Whilst for very vanilla clients this can be a useful way to get a rough idea of what they might be paying, for comparison sites to give people a more accurate idea of cost they need to significantly increase the number of questions they ask.
Although this would also require lenders to provide their criteria on these points to the comparison sites.
The main thing for me is that comparison sites make it clear that quick quotes systems are just that, and do not look at individual circumstances to confirm eligibility.
They could then suggest that the person speaks to an appropriate broker to confirm what type of pricing they are eligible for and which product is best for them.
Rather than just recommending one brokerage firm, comparison sites could partner with several in order to offer a complete range of specialist services to their users, from online brokers to buy-to-let specialists, complex residential specialists and the like.
Getting the client to speak to the right broker for their circumstances as soon as possible will benefit everyone, but especially the client. It will save them time and ensure any decisions they make are based on accurate information.
Advice is essential in one of the largest financial transactions of a client’s lifetime. Comparison websites should absolutely be encouraging consumers to seek advice from a professional.
By definition, comparison sites are a snapshot of the deals available in the market, however, they are not providing a valuable advisory process in line with the Financial Conduct Authority’s regulations that mortgage brokers adhere to. This could be detrimental to the client.
This could be compounded if a comparison site is only showing a range of products from a small portion of the market. Therefore, it certainly makes sense that comparison websites should be directing clients to talk about their needs and aspirations with an independent adviser who has experience in, and access to, the whole of the market.
This will ensure that they end up with the right product for them as they have the benefit of a full assessment of their financial circumstances prior to a formal recommendation being made.
The loss of this benefit could ultimately be costly to the consumer if they have acted on an information-only basis as they may have missed vital nuances that a professional broker would have easily spotted.
The issue brokers have is how do you incentivise comparison websites to introduce clients to them, and once you do, how do you give the correct level of service to the anticipated deluge of leads?
Unless a brokerage has a large team behind them, this may put a comparison website off a working relationship for fears of a lack of service which could tarnish their reputation.