I don’t see enough collaboration between broker and lender, broker and regulator, regulator and client, each entity failing in turn to understand the position and motivation of the other.
Mortgage Introducer speaks to Martin Stewart (pictured), director of London Money and new mortgage club The Adviser Alliance
It’s been four months since you launched The Adviser Alliance. How are things progressing?
I tend to liken the launch of a new venture to that of a plane taking off. We are at full throttle, have passed the point of no return and the engines are screaming while we bump through the clouds hoping to find some clean air! The vision of TAA is unshakeable but to carry on with the current analogy a plane is off course 99% of the time and likewise with this venture we will forever have to correct our position as we go along.
When we first mooted this idea in November last year I had no idea it would look like it does today. I generally take a supportive and a “yes let’s do it” approach to most things so I was surprised and a little disappointed at the reaction of some within the industry to our initiative. More so when you consider it an initiative that would not impact the advice process, have no detrimental effect on the lender and all the while improving the cashflow of the mortgage broker.
Have you exceeded expectations when it comes to taking on new members?
I think we are where we need to be for the moment. One of the biggest killers in business is the instant success. I would much rather try, fail, learn and go again.
We have been forced to change our initial message which was perhaps too simplistic for the industry but if there is one thing I have learned in the 25 years of financial services it is never to underestimate a vested interest.
We are adding new members all the time and have removed the upfront cost to brokers to compensate for the fact that we have had to remodel the proposal. But, and this is worth remembering, TAA still remains the cleanest, most transparent and most profitable mortgage club for the adviser.
What are your plans?
This is not just about being a mortgage club; this about us elbowing our way on to the top table in order to have our say.
I don’t see enough collaboration between broker and lender, broker and regulator, regulator and client, each entity failing in turn to understand the position and motivation of the other. For example, as advisers we see the emotion within a client but the lender only sees the algorithms. The two are not good bedfellows.
Likewise, I have never been invited to a lenders office to sit with an underwriter and see for myself what I don’t normally get to see. By bridging the two we can then create a much better client journey with much better outcomes and thereby satisfying the regulators main remit. That is an all-round win so what is not to like?
There is some excellent work being done in the IFA sector via NextGen Planners and I can see us working closely with them as we try and develop a better educated and more collaborative industry.
How have advisers responded to The Adviser Alliance?
A lot depends on the adviser! The smaller DA has been on board from day one as they are the “forgotten many” and one of the main reasons why we started TAA in the first place.
It is widely accepted, and indeed has been confirmed, that the small end of the DA spectrum are subsidising the larger end of the broader market. Why should that be the case? I know the argument will be “distribution and volume “but I have looked through the FCA handbook and neither of those words appear in there.
Speak to any decent broker and they will talk about “advice and suitability” which is exactly how it should be. If that is the case then a one man DA based in Cumbria should be able to access the same rates as an AR in London and, as importantly, be paid the same for doing what is essentially the equivalent job.
That said we are not called TAA for nothing. This is not setting one form of authorisation off against another. Far from it. We want to see the mortgage broker – whoever they are and however they operate – placed firmly at the forefront of the industry.
What problems have you had to overcome?
There's been plenty of challenges, but I don’t think it would be professional to start listing the negativity and objections we have endured. But let’s say it was disappointing to see some responses from certain entities. What was more galling is that these were award winners and as voted for by the broking community– something many of us will remember when the next email onslaught arrives asking for us to vote for them again.
In fact we took our concerns direct to the FCA who asked us for some feedback to help their ongoing mortgage competition review. I think it was fair to say that the two hours we spent in Canary Wharf was enlightening for both sides of the table.
We have great respect for the regulator and I can see the TAA working very well with them in the years ahead and we very much look forward to reading their interim report which is due out soon.
