One of the most revealing moments to come out of the FCA's recent Mortgage Rule Review Consultation may not have come from the publication of the CP itself, but from comments made by Emad Aladhal, the regulator's director of retail banking, in a recent interview where he discussing the role advisers play in helping consumers achieve home ownership.
Aladhal explained that when a family approaches an adviser, they are rarely asking for a mortgage in isolation. Instead, they are seeking help to buy their first home, navigate a major life decision and understand how they can achieve a long-term objective that often shapes their financial future for decades to come.
That observation struck a chord because it perfectly captures the reality of modern mortgage advice and, in doing so, raises an important question about how our profession continues to describe itself, or be described by others.
The irony here should not be lost on anyone, least of all me. Within our own group we have a business called JLM Mortgage Brokers, while many highly respected firms across the country continue to use the word broker within their trading name. There is nothing wrong with that and it reflects the history of our profession. However, I do increasingly wonder whether the language we use accurately reflects what advisers actually do for clients today because, in many respects, the profession has evolved far beyond the traditional notion of a ‘broker’.
The role has become much broader than arranging mortgages
Historically, the term broker suggested someone who sat between a lender and a borrower in order to arrange a mortgage transaction, but that description feels increasingly detached from the reality of what advisers are expected to deliver on behalf of consumers.
You could justifiably argue that today’s adviser is more of a consultant required to understand a client's circumstances in detail, assess affordability, discuss future plans, identify vulnerabilities, consider protection and wider financial requirements, recognise potential risks and help clients make informed decisions that may affect them for many years.
Those responsibilities frequently extend well beyond the immediate mortgage requirement because advisers are often discussing family circumstances, retirement aspirations, inheritance considerations and the role property wealth might play throughout later life.
Many clients will maintain a relationship with their adviser for decades, returning repeatedly as their circumstances change and as their financial needs develop. That is not a transactional relationship centred on arranging a single product. It is an ongoing consultant relationship built on trust, experience and long-term understanding.
Consumer Duty changed expectations
The introduction of Consumer Duty accelerated this shift and, in many ways, formally recognised what the best advisers had already been doing for years. The focus is no longer simply on securing a mortgage that fits a client's needs today. Advisers are expected to consider foreseeable harm, deliver good outcomes and understand the wider circumstances surrounding every recommendation they make.
That responsibility also requires advisers to recognise when a client's circumstances, objectives or potential risks extend beyond the mortgage itself. In many cases, part of delivering a good outcome involves identifying issues that may require specialist support and signposting clients to other trusted professionals, whether that relates to protection, later life planning, estate planning, tax considerations, wealth management or other areas of financial advice.
Importantly, this has increased the significance of the adviser-client relationship because, for many consumers, their mortgage adviser may well be the only professional adviser they ever engage with on a regular basis.
Many people will never proactively seek out a financial planner, wealth manager, retirement specialist or legal adviser, which is precisely why the mortgage consultant is often the person best placed to identify when those conversations should take place and to guide clients towards the appropriate expertise. However, they will seek advice when buying their first home, moving house, refinancing, investing in property or considering borrowing options later in life.
The consultation paper reflects what advisers already do
What makes the recent FCA consultation particularly interesting is that it appears to recognise this reality in a way that previous regulatory discussions perhaps have not.
The paper considers how to improve access to mortgage finance for first-time buyers, self-employed borrowers, those with more complex income structures and older borrowers who may require lending solutions later in life. In effect, it looks at borrowing needs throughout an individual's lifetime rather than focusing solely on a single mortgage transaction.
That is significant because it mirrors the way advisers now work with clients. The consultation is effectively examining borrowing from the moment an individual first enters the housing market through to the point where they may be considering how housing wealth supports them during retirement.
When Aladhal went on to talk about helping consumers understand their wider financial arrangements, their pension provision and how housing wealth may be utilised later in life, it felt as though the regulator had finally articulated what many advisers have been saying for years.
An evolution of language
This is not an argument for changing job titles simply for the sake of it, nor is it an attempt to dismiss the proud history of mortgage brokerages within this country.
However, if the regulator itself is now describing a profession that helps consumers navigate financial decisions from their first home purchase through to retirement, then perhaps it is time to acknowledge that the modern adviser/consultant has become much more than a traditional broker.
The profession has evolved into one centred on guidance, planning, support, risk identification and long-term relationships, with advisers increasingly acting as trusted consultants who not only help consumers secure mortgage finance but also recognise where wider financial, legal or retirement planning considerations may exist and ensure clients receive the support they need.
Regulation has changed, consumer expectations have changed and the responsibilities placed upon advisers have changed considerably over recent years. Therefore the language we use to describe ourselves, or how we are described, needs to catch up because the role being performed today is about far more than brokering a deal. It is about providing professional advice that helps consumers make better decisions throughout their entire financial journey.
