"It's thinking about your advice process and thinking about those softer skills, and how you get those clients to tell you the information."
- Vikki Jefferies, Primis
The mortgage industry is evolving, and advisers must stay up-to-date with industry developments and understand clients' financial situations to provide tailored solutions, according to a panel debate at the recent Mortgage Adviser Event in London.
The session in the Modern Lender seminar theatre was chaired by well-known industry face Roger Morris, and took a deep dive into how consumers' needs are changing - and what advisers can do to assist.
David Hollingworth from L&C Mortgages opened the session by noting that many advisers will not have been used to a rising rate environment, "let alone one where it's risen so quickly".
He said: "There's a lot to deal with, and a lot to adapt to. Probably for the longer term that is going to change the shape of the conversations that you're having. Most people may still be going for fixed rates right now. But as time goes on, there's going to come a point where they start to shift and look for different options. And that's where advisers are going to really add additional value to what they're already doing. And helping people just navigate through was a very, very difficult time for a lot of households.
Phil Daffern from SimplyBiz discussed the changing face of borrowers, highlighting multiple streams of income, ancillary incomes and second jobs, alongside part time and self-employed borrowers and an ageing population who need to borrow for longer.
Greg Cunnington from Legal & General, added that "it's not only the income side of things, a lot of it is actually the client profile and their expenditure."
He explained: "With the affordability challenges of higher mortgage rates, you've got a scenario where actually maybe the client circumstance wasn't complex only three years ago, they just had kids, but they paid for school fees for and they've got a car on finance. Now, all of a sudden, that's a very complicated scenario. And you combine that with the different income profiles, like Phil said, and suddenly a very easy place to case historically, is now a lot more complex."
Turning to what brokers can do, Vikki Jefferies from Primis said: "It's thinking about your advice process and thinking about those softer skills, and how you get those clients to tell you the information. I think we've got a lot of customers at the moment that are very fearful of mortgage rates, and that may affect the discussions that they're having with you in that initial meeting. So think it's about having a robust back find with the right questions, but equally creating that comfortable environment, where it's okay to be honest."
The panel agreed that technology can streamline the process, and partnerships with experts can provide a deeper understanding of complex mortgage products.
Cunnington noted that technology has helped "do a lot of the heavy lifting" when it comes to the fact finding process. But he added: "What we don't want to do is fall into the trap of getting the tech to do too much of the work. Because what you could do, for example, is say, 'Hi client, here's your fact find link, please go into the portal and fit it in'. You get it through, you think you've placed the case. And all of a sudden, you actually go into the detail and you realise they do have a second job, or they do have another income stream, or they've got a portfolio of buy-to-lets you see on the bank statements, and you've not taken the surplus rental into account."
Jefferies agreed, stating: "Don't forget the fundamental basics of the advice process."
Turning to education, Jefferies said: "You have to spend some time on educating yourself, not just on the basics, but really getting to grips with lender criteria, understanding who does what, at what points. There's a lot of mainstream lenders that are looking to diversify their product range, so it's worth considering those."
Cunnington added that lenders should also provide ongoing education, saying: "If intermediaries actually know why lenders are making certain decisions, and if they communicated more, that helps everybody."
In addition, the panel agreed that partnerships with experts can provide a deeper understanding of complex mortgage products.
Daffern said: "Do what you're comfortable with dealing with, then look to diversify. But if you're diversifying into an area of your business that you're not proficient in, then partner with somebody. Use somebody's expertise, work with a packager to understand something first, before going on alone."
You can watch the full panel session from Mortgage Adviser Event London in the video at the top of this article.
