What do intermediaries expect from packagers? This might seem to have an obvious answer with the cries of good products and low rates and higher commission at the top of the list. But there is a wider expectation that should really be at the top of advisers’ lists when deciding what they want from packagers.
The fundamental reason why brokers use packagers has been the access to lenders that only use packagers as their route to market. For packagers to continue to be as influential in the market, they have to look further than the obvious benefits provided to introducers and recognise the market is changing and becoming more sophisticated.
The question an intermediary should be asking its packager is whether the service it offers is of a quality that fits with its firm’s compliance footprint.
“Ability to deliver a service which complements that of the brokers and helps them to meet their compliance goals, will be the new differentiator”Some might think packagers are all the same and therefore there is little point. However, they are not the same and the ‘quality’ issue and how it affects intermediaries is becoming more pertinent with the changing face of regulation and the growing professionalism of many in the packaging community.
Intermediaries will have to recognise that any, or all, of their professional contacts can have an effect on their ability to stay compliant. Looking to packagers to provide access to the best products is one thing, but their ability to deliver the right kind of service, which complements that of the intermediary and assists them to meet their compliance goals, will be the new differentiator.
This means that if we look past the products themselves we have to see whether the packager is offering whole-of-market access.
An easy mistake to make when using a packager is if, say, an intermediary has already decided that the Superduper Mortgage Company’s 3.5% two-year fixed rate is going to be the recommendation, then finding a packager simply to access the product and process the deal is not a problem.
However, if like with many intermediaries, a packager also acts as a helpmate, giving a choice of products from which to make a recommendation then it is vital the packager is doing this from a wide enough range to represent ‘whole of market’.
Fundamentally, as we know, non-conforming or sub-prime mortgages are too complicated to be accurately analysed simply with a sourcing system and the packager role has become more important in assisting intermediaries make the right choices.
As part of the quality audit a good packager must be able to demonstrate its service is robust enough to ensure the customer’s application is dealt with in a timely manner and that information about the progress of the case is available both orally and written.
With increasing importance placed on technology, good packagers should have an interactive website allowing intermediaries to not only access detail of the progress of a case but also be able to send and receive an agreement in principle and application.
Quality management will be the watchword for the new generation of packagers. Those that have not seen the signs of change should explore other business opportunities.