Time for a change?
Bob Hunt is chief executive of Paradigm Mortgage Services
As the holiday season kicks fully into gear, I suspect there will be very few of us intending to use our much-needed time away from work – if we’ve not taken it already – to do a ‘Summer clean‘ of our finances.
Instead, we’re probably going off to spend quality time with our family and friends, and hopefully take a well-deserved break.
The problem, of course, is when do you find time to ensure you’re on the right deals? Take the mortgage rates that are available at the moment – if you were not an adviser, how likely were you to be aware that we are looking at record low levels for certain borrowers?
Of course, that’s where an adviser comes in – contacting those clients well in advance of any remortgage date and, in this current environment, also highlighting to those existing borrowers that money could still be saved even if they are not at the end of their special rate.
In other words, consumers rely upon their advisers to keep them informed, which is why we talk so much about client engagement and regular communication strategies. Left to their own devices, many would take the first deal offered by their lender, even if their needs and circumstances had changed.
But, how do advisers go about ensuring they are getting the best of everything from a business point of view? Like in the consumer space, there are many services offered which rely upon adviser inertia in order to keep profitable, and even though there might be much better alternatives available, the perceived ‘faff‘ of changing, the belief that it’s going to take too much of your time and resource, the fear that you’re actually with the best operator, might actually stop you from doing anything.
Essentially, you need the equivalent of an adviser perhaps just to tell you to ‘shop around‘, and these summer weeks might be the best time for you to kick that into motion. So, let me highlight a couple of points that you might wish to look into when it comes to the mortgage distributors you use, because these will not be offered by all and it gives you a base from which to work from and make that comparison.
What we want advisers to do is to go to the distributors and clubs you use – including us – and ask them whether they offer this. If they do, all well and good. If they don’t, you might want to consider why, and you might want to question whether you’re with the best option.
First up, of course is access to lenders, providers and products, across a range of mortgage, protection and GI sectors. As well as ancilliary services that you advise on – essentially can you access these through your distributor. If not, why not?
Secondly, what about compliance support? As a DA firm can you access compliance personnel and tap into their experience to make sure your firm is working in all the right ways, and you’re made aware of what might be coming down the track?
Thirdly, what about help desks for those clients and products for which you could do with further information, or potentially a second opinion on the options available to you?
Fourthly, is there an academy function? T&C is a massive part of an adviser’s life and you want to ensure you, and your staff, are up to speed, and you’re meeting all your requirements (and then some) when it comes to training, qualifications, testing and the like.
Finally, are you getting full value for the business you place through that distributor? The base commercial terms you receive, at the very least, need to be in line with other distributors, and certainly better than if you went direct to the lender.
For 14 years we’ve operated a profit share for our members, whereby they receive a 50% split of all retained fees received by us, in addition to the procuration fee. That money is paid once a year, and it can soon add up – firms who process just three residential and three buy-to-let cases per month with Paradigm, could earn on average, £2,580 of additonal income per financial year. The vast majority of firms will be processing much more business than this of course, so you can see the possibilities for extra income.
Again, if your distributor or club doesn’t offer this, then perhaps you might want to consider those that do. This is a very welcome addition to the bottom line and is paid automatically. You don’t even need to go out and ask for it yourself.
These are just a few questions to ask of those you work with. Changing your distributor or club might seem like a massive deal, or it might feel like you are being disloyal. However, that loyalty needs to be rewarded – if it’s not then take the time over the summer to reassess and get the very best outcome for you and your business.