It’s not often that the mortgage sector looks on jealously at other areas of financial services. Usually, we in the mortgage ‘crew’ can look down at those in pensions, investments and insurance, safe in the knowledge that we are a lot cooler than they are. While insurance and pensions are focusing mostly on our inevitable death or long-term illness, we can at least say that mortgages are all about the here and now.
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So even though mortgage brokers are obviously the cool kids, those advising in pensions and investments have the upper hand when it comes to knowing the state of their client’s relationship with the product provider. It seems that every other sector of financial services will happily provide the introducer with information, such as client statements, to help them manage the client more effectively.
However, this has never been the case in the mortgage sector. As sole broker, Tony Catt, points out: “I get the mortgage offer but not the background information, such as the direct debit details. If the broker got all the information and the annual statements, we could keep much more of a handle on what is happening. If the lender wants us to do a better job, we need more information.”
Keeping the broker informed
This has begun to change ever so slightly though. Accord Mortgages recently announced it was set to inform brokers if their client had missed two mortgage payments, therefore allowing the intermediary the opportunity to get in contact with the client and establish why this had happened.
As Linda Will, managing director of Accord Mortgages, argues: “Lenders build systems so that the customer gets sent a letter when they miss a payment, so why can’t they just send a copy to the broker as well? A lot of the time, people don’t realise they’ve got into trouble and they just stick their heads in the sand. If you let the broker know what’s happening, they can contact the client and help them before they get in too deep.”
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So is this move by Accord the start of a wider shift towards mortgage lenders being more open with intermediaries?
Paul Hunt, head of marketing at Platform, admits it is an issue that more brokers are becoming aware of. He explains: “Many of our top intermediaries have mentioned this to us in the past few weeks and we are always looking at ways to add value to brokers’ businesses. This is potentially one way of doing this, but it has to be thought through so that it benefits the lender, the mortgage intermediary and the customer.”
A change in attitude?
Chris Cummings, director-general of the Association of Mortgage Intermediaries (AMI), believes the next year will see a change in lenders’ attitudes.
He says: “I think in the next year we will see the market become much more divided between those lenders who are looking at reinforcing their branch networks, for example, and those looking to establish their relationship with the broker market. It will become obvious where the strategic focus of each lender lies, whether it is online, through branches or intermediaries, and at AMI we would like to see greater transparency in which strategy is being pursued.”
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However, this doesn’t automatically mean that lenders will be willing to share the client’s data simply because they are focused on a broker, rather than a branch network. Lenders have long argued that the Data Protection Act inhibits what they can do and what information they can release.
For Catt, greater communication would bring benefits to lenders as well as the client.
“It’s all about the trust that is built up and it does help the relationship if the lender is providing the information. Also, if you are introducing business and it keeps going wrong, it would identify to lenders those brokers whose clients have a high rate of defaults and who may not be doing the best for their clients. We should be treated more as a partner in a process rather than just the start of it.”
But for Hunt, it’s more about taking charge of the situation and helping put the client back on track as soon as possible.
He explains: “All lenders have their own arrears and client management systems and, especially when it comes to non-conforming clients, you have to know what to do and be proactive in doing it. The danger of solely relying on the broker when it comes to arrears is not all advisers want this information.”
Therefore, it seems one of the major factors holding lenders back from giving more information is the fact that not all brokers are guaranteed to use it. Building an extensive client bank is becoming a bigger part of an intermediary’s job but all brokerages have different business models and some see themselves as purely ‘introducers’ and nothing more.
While Cummings accepts this, he believes mortgage intermediaries should be given the choice; and that means having access to the information.
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“Some brokers don’t want a relationship with the clients, such as if they work in an estate agency, and there is nothing wrong with that. But some do and the discussion over supplying client information just doesn’t occur in other markets as providers and IFAs expect this information to be available.”
