Regulation

Building your business

19 January 2008

Without facts, all you have is an opinion.

We all have a view about what is best for our customers, but we decided to ask them directly, and conducted a customer survey as part of our response to the Financial Services Authority’s (FSA) discussion paper on its review of retail distribution.

While the review relates to investments, the survey results provide some valuable insights for the mortgage intermediary:

• Customers value independent advice. They define this as having access to the whole of the market and the firm being free of ownership from providers.
• Customers are more likely to turn to advisers who have higher qualifications than the minimum requirements. They welcome advice from experts.
• Customers view experience as equally important as qualifications, suggesting the ideal mix is one of qualifications and experience.
• Customers believe that advisers, rather than providers, carry the most responsibility if their products do not meet expectations. However, nearly a quarter take the responsibility upon themselves.
• Customers believe in treating advisers fairly; nearly three-quarters believe that the adviser should pay the Financial Ombudsman Service only if a complaint is upheld. However, few – around 7 per cent – believe they, themselves, should pay if the complaint is not upheld.

The survey was conducted in two parts; the first from the public through NMG MarketMinder, and the other through Burns-Anderson’s network members’ clients.

The two results followed a similar pattern but, unsurprisingly, members’ clients highlighted more definite standpoints. They showed greater appreciation for the advice received and for the value of ongoing service.

Over 60 per cent of our independent financial advisers also give mortgage advice; therefore their service proposition translates readily into this market.

Lessons for your business

Nothing beats the combination of comprehensive knowledge, excellent customer relationships and service for retaining your client bank. However, to meet the challenges of the future and to build your business, the messages are:

• Higher qualifications make you more marketable.
• The value of ‘life’ skills should not be ignored. Being technically proficient has to be balanced with interviewing skills and being able to write and present recommendations in a way that demonstrate understanding of your customers.
• Independence and access to the whole of the market reassures customers that you have their best interests at heart.
• The future of your business is built on trust.

Trust is a wonderful thing until it breaks down. The few complaints upheld tend to be because the expressed needs and attitudes of the customer have not been reflected or recorded adequately in either the factfind or the written recommendations.

This means that, at a later date, the recommended mortgage is not seen in the full context of the customer’s situation at the time. So trust is a double-edged sword.

The basis of that trust needs excellent records to prevent brokers accidentally cutting themselves.

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