Mortgage brokers face an increasing choice of product providers and therefore the chances of missing out a vital lender and a particular product from their research when trying to match a client’s needs, continue to rise. Of course, there are sourcing systems and, yes, the Financial Services Authority does allow that ‘whole of market’ can mean a representative panel of lenders rather than every single lender. But choice is as much a curse to good advice as it is an advantage for customers, particularly if the choice is being made from too narrow a spread of lenders.
Sourcing systems have their place as a means of sorting the wheat from the chaff and whether we like it or not, the default setting that shows lenders in descending order, with the cheapest first, has given intermediaries and lenders an unhealthy obsession with headline rates at the expense of overall cost and service standards. This is not helped by the woolly interpretation of the regulatory rules concerning ‘cheapest being best’. Making the correct recommendation is much more than simply choosing a product from the top of the sourcing list.
The increase in the categories of lending, particularly in the non-conforming market, with near prime, light, medium and heavy adverse has also helped to exponentially increase the options and sourcing systems are just unable to provide the accuracy that is required to pinpoint the best product. To be able to programme in every variation and permutation to come up with a perfect choice is beyond the scope of any sourcing system especially if we mix in the service factor where certain lenders move from good to poor service standards.
Packagers fulfil huge services to intermediaries in providing human expertise and understanding of the nuances of non-conforming products and the reasons why in a lot of cases the ‘top of the list’ product on a sourcing system is not as good a deal as the intermediary was led to believe.
It is worth remembering there is still some resistance from intermediaries to using packagers in general and it stems from two main complaints. Firstly, some intermediaries feel they are having to share ‘their’ procuration fee with a packager, which is an indictment of the value they see in the packager’s role in the process. The other objection comes from having had a bad experience where the packager is blamed for poor service.
Packagers can’t legislate against the poor service aspect, as there are bad pennies in every profession. But the industry should be arguing the case against those who feel working through a packager means they are having to begrudgingly ‘share’ a procuration fee.
Exclusive Connections has always projected its service as being about providing expertise, knowledge and breadth of market exposure – therefore, generating the right scenario of choice so that its intermediaries can make confident recommendations and then, as importantly, see the cases through to a satisfactory conclusion.
We all need to argue for the quality of the packager service to overcome the objections and bring more intermediaries on board.