Consumers know brokers make getting a mortgage easier, but are not so clear about the value of advice.
If brokers were to ask their clients about the reasons they decided to choose an intermediary for their mortgage it seems the answers might surprise them.
Research for Platform reveals that most brokers reckon it’s their expertise that appeals to clients whereas consumers think differently, not ranking this factor particularly highly.
Instead, the main drivers are ease and convenience. Of course, they are right to think brokers make the process easier but it’s surprising how differently the public ranks the benefits on offer.
Indeed, the second most important benefit, as chosen by brokers, is the access borrowers get to the whole market. But again consumers feel differently, placing this benefit behind helping them find affordable deals or doing the leg-work for them.
This shows that while consumers understand some of the important benefits the sector offers other key messages are being lost.
They recognise it can save them time but often don’t grasp the importance of brokers’ expertise and experience in the mortgage market.
Intermediaries know independent mortgage advice is invaluable but it seems consumers do not.
This gap brings the importance of Mortgage Strategy’s Define Advice campaign even more sharply into focus.
The industry must show consumers what brokers stand for and how they could benefit from using one. This doesn’t mean changing the great job brokers do but rather presenting the advantages they offer in a consumer-friendly and clear way.
Brokers think that expertise is their main selling point but consumers rank convenience more highly
Of course, all consumers are different and they want different things from intermediaries.
Our research reveals three distinct categories of borrower. The ’self-assured’ client is often confident about their market knowledge but time-poor. They want all the work done for them.
’Reassurance seekers’ have a reasonable grasp of the market but want to be able to rely on knowledge and advice to reassure them about their choice.
Finally, ’expertise seekers’ – who are often first-time buyers or those with little market knowledge – want guidance and hand-holding as well as a mortgage that is affordable. They rely totally on brokers to suggest the best deal for them.
All the client types listed above can benefit hugely from going to a broker and defining the advantages of intermediary advice would clearly demonstrate the added value provided, whether it’s stress testing to ensure affordability or highlighting the effect fees will have on the total cost of a deal.
This is an initiative for the whole broker market to get behind and Platform is fully supportive of the campaign.
We’ve already been talking to brokers and organisations with a stake in the intermediary market in conjunction with Mortgage Strategy, and are keen to get opinions from more.
If the campaign can help to encourage debate about how brokers should define advice we will be able to move towards producing a clear explanation of the advantages intermediaries offer and using this to promote the advice sector to the public.