The intermediary is king
Bob Hunt is chief executive of Paradigm Mortgage Services
Despite all our best intentions, there are many areas of life that we’re simply unable to change or do anything about. Take, for instance, the EU referendum result – with all the will in the word, and regardless of my feelings or those within my business, there is nothing I can do to change it. We might have wanted to Remain but Leave won, and (unless there is an unprecedented turn of events) those in power have committed to take the UK out of the EU.
In the immediate aftermath of the vote, and to be honest ever since, accepting that might have been difficult but (as we have seen all too well) life moves on. Or rather keeps repeating itself if you happen to be an English football supporter.
The point is that, as far as our business is concerned and regardless of how Brexit and the political machinations play themselves out, there are areas we can influence and benefit from and there are those which will happen regardless. I think it’s important for firm owners and particularly business writers to focus on the work in front of them and the potential for growth and opportunity, rather than get too bogged down in the wider economy plays and what might (or might not) be coming over the horizon.
Now, clearly, there is going to be an impact on both you and your customers, for example, if the Bank of England MPC cuts bank base rate (BBR). There will also be an influence in terms of job uncertainty and its potential for increases in unemployment; let’s also not forget that decisions to move home may be impacted by housing supply levels and/or how house prices react. But, the important point is that within all these developments and their impact there is a client need that can be serviced by you, the adviser, across multiple product areas.
It’s a point that should not be lost on anyone that when the mortgage market is ticking along nicely, when intermediary share of the market is growing, and when there is a pre-stamp duty deadline rush of landlord borrowers and investors, the inclination is to focus on the mortgage side of the business. Anyone, looking at a strong future within this sector should be disavowed of this notion right now – this is all about covering as many client wants and needs as possible and ensuring your client does not need to go anywhere else. Or if they are ‘leaving’ you, then it’s through an introduction that you have made to a specialist distributor/adviser/packager and you’re earning your introducer fees.
And let’s be honest, if we look at the opportunities across the entire piece, then there are grounds for positivity. My view is there will be continued demand for house purchase in this marketplace – be that from first-timers, second-steppers, or buy-to-let landlords; at the same time we have to consider that the deals available for those looking, or willing, to remortgage are pretty spectacular. We’ve already seen considerable cuts to pricing and, with a BBR cut on the horizon perhaps, lender competition in this area will only intensify. If you are not contacting all your clients who are in a position to remortgage, then why not?
Let’s also not forget that these are not times when intermediary advice has lost is allure. We all know that currently the intermediary is king, and with lenders seeking market share and looking to hit targets, all eyes will be focused on intermediaries to deliver this. Great strides have also been made in technology in order to support advisers not just in their core mortgage advice space, but in all manner of cross-sales. Again, for products such as GI and, especially in uncertain times, protection, there are really no excuses for not at least covering these off. When you consider this, now does appear to be a great time to be a mortgage/protection/conveyancing/legal services/GI adviser.
Finally, the rewards are beginning to become commensurate with the work you have to put in. I firmly believe we have moved into a different climate and, especially by utilising distributors like ourselves, advisers can greatly increase their earnings potential. The move towards retention/product transfer procuration fees appears unstoppable and lenders are looking for quality advisers and quality business which they will reward.
As business owners and advisers it can be easy to become fixated on the unknowables, the uncertainties and those things we can’t control. However, if we are positive about these times then the rewards and growth are there for the taking. By inspiring confidence and demonstrating real clarity of thinking within our businesses and with our clients, we can certainly prosper at a time when many might have thought this impossible. The opportunities are there, you just need to grab them.