Intermediary Mortgage Lenders Association, says although the trade body considers on an ongoing basis how to highlight the efficacy of advice to consumers it does not have the resources to put any specific campaign in place. “We have to think about what a trade
body role is and also the resources we have,” he says. “The intermediary market is particularly strong in specific sectors where consumers most benefit from the assistance of a professional mortgage adviser such as buy-to-let landlords, first-time buyers or those who have experienced some level of financial difficulty. But the reality is a major consumer campaign to promote advice would be beyond the resources of IMLA.”
CHECK OUT But there are those in the market who have the will to do it. Last year AMI and Legal & General commissioned research
into consumer attitudes to getting a mortgage and found one out of five would-be borrowers believes they won’t get a deal due to lack of mortgage funding.
It also found 3.4m people planned to
secure a new mortgage between summer 2011 and summer 2012 while 1.6m would need to remortgage. The startling figures were that while 81% of borrowers would prefer to get their mortgage sorted in one trip as opposed to trawling the high street, only 44% plan to see a broker. The research was funded by Precise Mortgages – an intermediary only lender which reveals it is planning to run a second round this year. Alan Cleary, managing director at
Precise, says it is clear for everyone to see that the intermediary market share of mortgages is declining. “Whether you look at CML statistics or the FSA’s there has been a decline every year since 2007,” he explains. “Clearly, HSBC and
Hiding the elephant by
Robert Sinclair director, AMI & AFB
Many column inches get written on the shift in percentages between direct and intermediary written business. The recent change in CML numbers makes me ask the question: if they were wrong before, given how long this series has been running, how certain can we be that they are correct now? I would also argue that the amount of business being introduced into direct channels by intermediaries is at an all time high and this is not measured at all. I am also clear that the contraction in intermediary sector adviser numbers has slowed considerably and the businesses that talk to me are indicating that conditions are stable or improving. This does not match
www.mortgageintroducer.com
with the lender-derived statistics which may not be as robust as many commentators might like. This can be seen from exercises such as the one being done by the Compensation Scheme currently where major investment firms have confessed to inaccurate FSA reporting, once it actually started costing them real money.
Many want AMI to embark upon a major initiative to persuade consumers to go to an intermediary first - to demonstrate the real value of advice. Whilst I have no issue with this concept, I am a realist. In order to establish the Money Advice Service brand the industry is investing over £20m this year alone to encourage customers to engage with the service. This is the expert view of the real cost to establish and engage. We do not have that money. Yes, I can and will engage in a public relations strategy that involves persuading newspapers and other
media to run stories and case studies on the value of brokers. It is highly likely we will do this. However we all need to understand this is time intensive and the results will be marginal. Whilst doing this AMI cannot be doing other things and currently our priorities are MMR, the European Directive and our effective separation from AIFA. So more on ‘value of advice’ later in the year. Perhaps a cheaper, quicker and
more effective route might be if all lenders took a long, hard, honest look at the MMR proposals, then a look at their offerings and then look in the mirror. If we all genuinely have to act in the customer’s best interests, and treat them with integrity and fairly, why would you not want to compete as a manufacturer in a fully intermediated world and stop promoting your limited, restricted, tied offering directly? You certainly should not be pricing against such a cheaper route to market. That is the elephant in the room.
MORTGAGE INTRODUCER JANUARY 2012 33 MORTGAGE INTRODUCER MARCH 2012
other direct lenders are doing well in the battle for market share and whilst it may not be critical just yet, at what point do intermediaries become unimportant to lenders? “I don’t know the answer but we are seeing more and more lenders covertly pulling away from intermediaries. I think the time to stop the rot is now and all who have an interest in promoting the benefits of intermediaries to consumers should be pulling together to get the point across.”
Cleary raises the most relevant question for mortgage brokers. “At what point do intermediaries become unimportant to lenders?”
The answer will always depend on the state of the market and the volumes they want to achieve. But perhaps it is time the broker market turned the game around and sold themselves coherently to the public as the preferred route to mortgages. It might put intermediaries back in play.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52