I have now been writing these articles on a monthly basis for over a year now. They are meant to be a review of what is happening in the secured loans market and also to let everyone know that it is a buoyant market, which, on the face of it, and judging by the trade press coverage and advertisements that companies in the sector run, you would have no reason to doubt it.
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Sometimes when the deadline approaches for the article I think to myself, what new things I can tell readers this month in order that some new mortgage adviser or IFA will discover and start using secured loans? As we all know, the last 12 months has seen so many highs in the industry that we now have an established place in the mortgage market. Some of the new developments that have happened to establish this market would not have been predictable this time last year. A few examples of this can be seen in the amount of new lenders that have entered the market, and the number of secured loan packagers that are now also actively involved. A good example of this was the Expo at Manchester where there were no fewer than 12 specialist secured loan brokers showing their wares.
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As well as these highs, there have been quite a few lows that various people who normally write about secured loans in the trade press have mentioned as well – although the majority of these things are mainly aimed at competitors rather than the industry as a whole. Some of these lows include complaints about the split of commission to introducers, misleading introducers by giving them an indicative quote and not a definite one, and promising unachievable service levels.
A different approach
You are probably wondering why I am going on about the same old thing that is written in the trade press by the usual writers of these articles, which is probably the reason that this article will only be read by one person who has returned from a round-the-world trip where secured loans was the last thing on his mind.
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But I am going to mention something different and hope that introducers ask their secured loan broker not about commission, but about what they are planning to do about the new changes to the Consumer Credit Act that are going to take effect in the near future. In addition, what steps are they taking to deal with ‘Treating Customers Fairly’, unfair relationships, the EU White Paper, and the effect of the Financial Ombudsman Service on secured loans? Because in my opinion, the market is going to take some more twists and turns which, if specialist secured loan brokers do not start to take note and do not get involved, will result in you misleading the people who are the lifeblood of your ‘new’ business. You are burying your head in the sand if you think that the market is going to continue in its present format.
Having a think
Unfortunately I am limited to the amount of words that I can write in this article, so I cannot go into all these concerns but I would urge anyone who is reading this article to have a think. Yes, secured loans offer a very important option to your clients when they are looking to raise money on their property and it is now an established market, which is why I think that it is very important that if you are passing business, you not only ask about what commission you are going to get but also ask what preparations the broker themselves are making to ensure that your client is going to be looked after in the long term.
