It is clear that as we move forward, client choice is becoming more and more important in this ever commoditised world we live in. In the world of legal services it is particularly important that clients should have a choice of solicitors but that choice must, of course, be informed.
It’s often difficult for clients who are unaware of the specialist skills of solicitors to be able to make that choice and therefore brokers can play a crucial role in ensuring the client gets the right solicitor for the right job.
Clients should never be forced down a route of having a solicitor foisted on them because that could potentially lead to misgivings by the client – if it’s not the client’s choice, they could mistrust the reasons behind a particular solicitor being chosen. However, there is unfortunately a degree of truth in the lenders’ view that, as a general body, sole practitioners neither have the resources nor the specialist expertise to deal with the evermore complex mortgages on the market. These days, with such diversity in the market and customer awareness of their rights at an all-time high, being a jack of all trades is not an option any more, particularly in the legal market.
Eddie Goldsmith, senior partner, Goldsmith Williams
A far-sighted approach
Dear Sir,
I read with interest The Mortgage Times’ announcement last week that it is planning to set up training academies for new entrants to the industry. I can only support their initiative, which is both far-sighted as well as a practical solution to a problem which faces all financial services businesses looking to expand over the next few years.
One of the key factors which attracted us to Personal Touch Financial Services as an appointed representatives (ARs) was its commitment to ‘out of industry recruitment and training’. We have been working closely with it for two years now, and in conjunction with its own excellent online interactive training modules we have developed a tried-and-tested program to ‘fast-track’ new entrants through to full CeMap qualification in just weeks.
This has allowed us as a business to expand rapidly, without the need to ‘poach’ often overrated (and some would say over paid brokers from other firms). This model has now been rolled out to our business partners to allow them to expand as well, without losing time from their day-to-day jobs. We simply deliver back its ‘trainee’, fully trained and qualified and ready to slot straight back into their firm.
David Mead, managing director, Flexible-Mortgage.net Ltd
Meeting PPI head on
Dear Sir,
At last the Financial Services Authority (FSA) has lined up some of the biggest providers in the payment protection insurance (PPI) market and is going to tackle them head on.
According to reports from the BBC, up to 10 banks and lenders will be fined in the coming weeks for misselling PPI. It appears fines will be in the region of £1 million and while this is dwarfed by the profits many have made from this market, it is a substantial sum.
Many people, including myself, have been critical of the FSA and felt the regulator had not paid due attention to the biggest and worst offenders in the PPI market. However, it appears this is not the case and we can only wait with baited breath to see exactly who is held to account and what crimes they are charged with. In the first instance, it looks as if sales of policies to clients who were not eligible for the cover in the first place and single premium policies will bear the brunt of the enforcement actions – this is to be welcomed.
However, in line with ‘Treating Customers Fairly’, the FSA must also be looking to question providers over the design and pricing of their policies, the commissions attached to them and the claims ratios they achieve. In none of these areas do many policies really work in favour of the end user and certainly it would be difficult for the vast majority of banks and lenders in this market to make any sort of realistic representation that client needs form the focal point of their PPI activities.
For firms publicly found wanting in the coming weeks, the fine handed down by the regulator will only be the start of their problems. In seeing their provider fined for misselling PPI, many clients will then look to assess their own policy and see if it holds up to any sort of scrutiny. Now that some claims firms have begun to farm the market for possible instances of mis-selling, it will not take long for numbers to build. If this happens, any FSA fine will pale into insignificance alongside compensation costs.
At a time when the market is already finding it difficult to hold onto its shredded reputation, a public slap on the wrist is also likely to hit volumes for providers. Not only will consumers think twice about the provider they use, but more importantly, brokers may begin to distance themselves from brands seen to be failing clients.
The PPI market has walked a rocky road over recent years and too often failed its clients. For once there is real confidence that all the hard work that has gone into changing the status quo is eventually beginning to pay off.
Under voluntary regulation there simply wasn’t the bite to get things done, even when the problems were apparent. Now the FSA has the bit between its teeth, it has more than enough snap in its jaws to get the market back into line and must be applauded for doing so. The faster it can drive through these changes the faster it can provide the client protection its regime was established for in the first place.
Stewart Hastings, office manager, British Insurance Limited
Return of the u-turn
Dear Sir,
‘Here we go again’ was my first thought when I heard the news of the government’s latest decision on Home Information Packs (HIPs). So now properties put on the market before the 1 June will be able to stay HIP-free until March 2008.
Sadly this announcement from the Department for Communities and Local Government (DCLG) came as no big surprise. The decision to extend the pre-HIP deadline to March 2008 is evidence of an all too familiar trend with government initiatives – the u-turn. Together with their volte-face on mandatory Home Condition Reports (HCR), this latest move undermines confidence further that HIPs are viable as both a workable way of improving the UK market.
Surely one could argue that all this goalpost-moving does more damage than good to the much beleaguered HIP?
Jonathan Naylor, Rooftop Mortgages
Trail trial
Dear Sir,
For years we have been told that we should not rely on indemnity commissions, but instead build up our renewal/trail commission. This does make good long-term sense to help pay ongoing costs and should be able to be paid into retirement. Then recent comments say that we should not receive renewal/trail at all. It seems that those of us astute enough to plan our business model for the future could be penalised whichever way we turn. If we can be chased in retirement for previous advice, why should we not be able to recieve ongoing payments?
Name and address supplied
An Epic point
Dear Sir,
It's encouraging to see a shift in thinking from government about how we can start to speed up the whole property chain. However, with the removal of the HCR; I don’t see how the Epic’s are going to aid this. All it will ensure, is that the public will require more guidance than ever before about what the results actually mean. The HCR would have been a far more digestible format for consumers to utilise.
Ian, via e-mail
