I’ve been conducting an annual strategic review at Mortgage Intelligence as I do every autumn, and it’s got me thinking about what the mortgage market will look like over the next five years or so – and in particular the longer term implications for networks.
Who knows what the split will be between directly authorised brokers and appointed representatives but one thing is for sure, regulation and compliance will be everyday facts of life for years to come.
But by then intermediaries will have decided whether they want to spend time doing their own compliance or whether they want someone else to take the responsibility for it, with full knowledge of what either option entails.
My gut feel is that larger firms will increasingly want to shed the overhead costs of compliance and look towards working with networks in the nature of partnership relationships that add value to their business.
The range of products available in the mortgage market is becoming wider and ever more flexible and this trend is set to continue. This in turn will contribute to the growing importance of professional mortgage advisers, qualified to lead people through the complex maze of criteria, rates and deals on offer.
It is no surprise that busy consumers are willing to let someone else bear the burden of the time and effort required to sift through what is available and isolate the most appropriate mortgages.
Looking ahead, brokers will need to not only identify the most suitable mortgages for their clients, they will also need to be able to complete transactions in the fastest time possible. Technology developments over the next few years could make that transaction instantaneous, in which case it is even more important for the right product to have been selected at the outset.
But with so many products in the market it is important to have access to the best deals. I therefore see a network’s role as being key to completing the circle between consumer, broker, network and lender. By adding a wealth of market knowledge, bulk buying power and muscle if needed, networks should be able to play an important role in the mortgage market of the future.
Brokers may therefore wish to enquire as to their chosen network’s strategy. They may wish to be with a network that works in partnership with its members and will still be around to look after them into the next decade.
But if a network’s strategy is to burn as much money as possible to get to large AR numbers, attract a buyer and then run, someone at some point will need to make a profit to make a business case or it will simply fall over.
Therefore, brokers may want to keep abreast of the longer term strategies of their chosen networks and keep their eyes open for signs of networks that are simply fattening themselves up for a cash feast.
It they work together with brokers and lenders, the outlook for networks is as healthy as it is for the mortgage sector as a whole.