The financial industry has already made major moves to embrace technology, giving consumers more independence and putting them in control of their finances, including the sourcing of mortgages and payment support.
So this week, Mortgage Solutions is asking: What could lenders do to stop brokers from feeling excluded as services become more digital and direct?
The key thing lenders could do is to include something on the letter of completion which declares that the broker is the client’s agent and can act on their behalf ongoing.
This would make everybody’s lives easier. It would help the client on an ongoing basis, would mean that the broker could be kept in the loop and would potentially save the lender significant time as the broker could deal with more mundane questions on the lender’s behalf.
At the moment, many lenders write to the broker to say that a deal is coming to an end and will promote their new rates but cannot tell you which client this is regarding due to General Data Protection Regulation (GDPR).
While all good brokers will keep this client information on file it would be a lot easier if lenders could provide client specifics.
This works for pensions and investments so it should also be possible to work for the mortgage industry.
Over the course of this year, brokers couldn’t even help their clients with payment holidays, because it would have required another client permission letter. This has resulted in backlogs of calls for lenders, with staff working from home often having to answer the most basic of questions.
More and more clients are seeking advice and it is hard for many banks to meet this need.
Setting up an ongoing permission on completion of a mortgage will help to reduce these inbound calls while also keeping brokers in the loop as they can be copied into all outbound correspondence from the lender, providing advice when and where needed.
There has always been a concern that mortgage lenders seem to disregard the broker once a mortgage case is completed.
In general terms, we regard the client as ours, and we hope to service the client’s financial needs for many years to come – but the lenders regard the newly acquired client as their own, and market their services to them as such.
They refuse to copy the originating broker in on any form of communication with the client, including letters to offer new products when an initial deal comes to an end. There should be no GDPR issues if a client gives consent at outset.
However, lenders need to maintain healthy relationships with the wider broker community, who account for more of their new business than they can generate themselves.
We thrive on personal service, whereas the lenders thrive on cost and process efficiencies, and technologies that seek to cut out the middleman – the brokers.
Their scant attention to personal service is demonstrated by the reducing number of high street branches and staff, and the move to video calling in branches.
The key to any healthy business relationship is good communication – so, keeping the broker informed, with relevant and up to date information on everything they need to know – products, interest rates, application processing and progress, managing broker expectations and service issues.
The best lenders have realised that the way to stop brokers calling them every five minutes on urgent cases and slowing their processes down is to invest in technology that can email and text case updates regularly, on time and accurately.
Even in today’s digital age, many clients prefer to use a mortgage advisor rather than go direct to the lender or transact online.
We have seen an increase of product switches over the last few months but that is due to the pandemic, not necessarily because of client preference.
For most, mortgages represent the biggest outgoing, hence borrowers value independent advice and the knowledge that they have explored all options.
Having a healthy intermediary market is also good for lenders as they get fully packaged, placeable cases delivered to them without the cost of client acquisition.
I believe that lenders can do more to work with intermediary firms by working closely with them to ensure that the client journey is as good as it can be.
The difference in the lender’s service standards can be very frustrating. Some lenders are better than others at communicating upcoming rate or product changes and last minute rate withdrawals or post-agreed in principle cancelled cases must be avoided at all costs as they really do dent the adviser’s confidence.
We know that some of the lender’s conveyancers can also fall short of the required standard, with a conveyor belt like approach where quality of service can sometimes come second.
The relationship between an adviser and the client is far more personal and despite digital advances, many borrowers value that link and for me that is here to stay.