2015 has been an ‘interesting’ year however as we review where our market is
Bob Hunt is chief executive of Paradigm Mortgage Services
As we move closer towards the end of the year, it’s natural to think about what lies ahead and the challenges that we will face in the future.
I think it’s fair to say that 2015 has been an ‘interesting’ year however as we review where our market is, it also seems obvious that the intermediary sector maintains a position of strength which, if capitalised upon, could be the norm for a number of years to come.
We often see the various parts of our market as very different, forgetting perhaps there is inter-connectedness and in many cases an interdependency between stakeholders whether they be advisers, lenders, distributors, packagers, solicitors, etc. I was reminded of this recently when coming across research from EDM Mortgage Support Services asking mortgage advisers their views on the major challenges facing the lender community in the future.
Looking at those areas where brokers feel lenders have serious issues to overcome, I couldn’t help thinking these were pretty much the same ones that many stakeholders, not just advisers, active in the mortgage market right now have to confront. Those being:
• Increased regulatory and compliance demands.
• Use of technology/reliance on outdated technology.
• Maintaining relationships.
• Streamlining the mortgage application and approval process.
• A lack of transparency across the mortgage application and approval process.
Now some of those listed above are specific to the way brokers deal with lenders and the problems they believe lie within that relationship however others can probably be applied across the board and are issues with an industry-wide dynamic. Take for instance the increase in regulatory and compliance demands – we know full well that since ‘Mortgage Day’ there has been a growing responsibility for all firms in securing ongoing compliance. This is a process which does not stop – MMR is soon to be followed by MCD, and we are already hearing of reviews of the entire advice process which will, no doubt, bring with them more changes and required action.
This is a regulatory wheel that never stops and clearly this is not just a lender issue. Indeed, while MMR was perceived as a predominantly lender-focused series of changes, they did require action on the part of advisers; now the same could certainly be said of the MCD which will prompt changes by every single mortgage firm. Having a mindset which acknowledges the need to be up to date and to continually assess one’s regulatory compliance is a challenge but it is certainly much-needed if firms are not going to be pushed off course by future action.
Being acutely aware of the information gap that might exist between new rules and regulations Paradigm, in the run up to and through MMR, gained something of a reputation for supporting DA firms (and not just our membership) by providing the practical help and support advisory firms needed in order to put that theory into practice. We're doing the same now with MCD, offering regular updates and support documents, plus our own compliance services, in order to help firms along that particular road.
The other challenges mentioned by advisers with regard to lenders seem equally applicable to all other firms – the use of technology being especially important given the rate of development and change that will be visible to all. Systems and processes are constantly being updated and added to, plus now we have a whole host of new ways to interact with clients - almost all via mobile devices. To digress, did you know it's estimated that there are twice as many mobile phones in world today as toothbrushes? Understanding how technology can help rather than hinder a business is and will continue to be an increasingly important part of a competitive landscape.
Finally, whilst it would be naive to deny that at some time in the future robo-advice will feature in certain customer interactions, relationship building is clearly a mainstay of any successful advisory practice – whether it be that between the adviser and client, adviser and distributor, adviser and lender, the list goes on. We can’t get away from the fact strong businesses are built on strong relationships and again, part of our job as a distributor, is to help facilitate firms to have the best relationships with all appropriate manufacturers be that lender, provider, referral partner or any related service provider they want to deal with.
Undoubtedly, there are challenges to overcome in this marketplace and they will keep on coming.
The old chestnut - change is a constant is most certainly relevant. The object lesson is to be in the best possible shape as an individual and/or firm to deal with them.
Having a distributor which is there every step of the way for you, or a network which offers access to everything you need, is a real bonus for those firms who want to make the most of what may be a challenging market but one that is also full of opportunities.
