Like many IFA firms, the majority of mortgage intermediaries each have an average of only a few staff. Indeed, one-man bands are still very common, if not the norm in the mortgage advice community. So how do one-man bands cope with the ever increasing range of complex products? Some would argue that the answer is that they cope badly or not at all. ‘Generalist’ mortgage brokers are perhaps slowly sinking beneath a mass of regulation and paperwork. This is not a criticism – it’s a natural consequence of the demands of having to deal with such a wide range of products and increased regulation.
get the daily news delivered to your inbox
Let me illustrate my point. The average mortgage broker can, on any given day, be faced with a client or clients whose needs could be for a prime mortgage or for a non-conforming mortgage; or the client may need a commercial mortgage; he or she may be self-employed or want to invest in a buy-to-let property. He or she may need a self-certification mortgage, the loan may be secured, unsecured and – perhaps most likely, he or she might want a remortgage. The list is literally endless.
A peculiar mortgage
Every mortgage has its own peculiarities as does each and every lender, all with their own underwriting criteria and different requirements. Furthermore, there are, for example, different processes for residential and commercial mortgages – the adviser must understand and be conversant with them all.
register for the next forum
Of course, the story doesn’t end there. Beyond the mortgage, the client is also likely to have protection needs ranging from life cover, through critical illness cover to income protection. The intermediary needs to understand them and, in the case of income protection, understand the differences between a client’s short term needs for mortgage payment protection insurance or accident, sickness and unemployment and his or her long-term needs for permanent health insurance. As with mortgages, each provider has its own ‘small print’ and exclusions which, again, the adviser needs to know and be able to explain.
Then there’s the ever increasing additional insurance needs – buildings and contents, landlords’ buildings along with the plethora of other insurances such as pet, motor, and travel, etc. The mortgage intermediary wouldn’t be doing his or her job – not to mention missing out on a sales opportunity – if they didn’t identify those needs too.
Download our news ticker
Master of none?
So, being an average mortgage intermediary very much means being a jack of many trades – but this is a really tall order. Surely it takes an extraordinary type of individual to be able to specialise in all types of mortgage and the attendant insurances, and at the same time run the business successfully, find new clients, and chase product providers? Even if such a person exists, understanding all the relevant areas isn’t enough. Our friends at the Financial Services Authority now insist that any mortgage intermediary who wants to undertake, for example, equity release cases needs to not only understand them and have specific professional qualifications that cover the subjects, but also to demonstrate that he or she consistently writes four or five such cases of this type every single month.
Find the latest industry jobs
Frightening prospect
Being a one-man band is a lonely and increasingly demanding existence. Mortgage intermediaries are faced with a number of choices: remain as generalists and somehow cope with spiralling demands; specialise in one or two particular areas or perhaps link with other intermediaries who can each specialise in their own preferred fields.
catch up on the industry jobs
Unfortunately, in my experience, inertia often sets in and many brokers shy away from change. Specialisation can be a frightening prospect. Therefore the safest route to many out there may seem to be to continue as they always have done but perhaps just ‘work a little harder’. Of course, in my opinion and in the opinion of many others, this isn’t the right answer.
