Yes, there are rotten apples in the barrel but the exodus of almost 800 firms leaving the mortgage industry last year will have included many who should not have been advising in the first place.
Advisers are at the raw end of consumers’ wrath or joy while lenders – the faceless baddies – leave the bad news for the adviser to deliver.
The bad news at the moment is a lack of funds for lending. There are now fewer active lenders in the market and although the government is using a mix of public funding and the birch to encourage lenders to open their doors and continue lending we are at the lowest level of lending in almost a decade.
What we are seeing is consumers continuing to contact their brokers for mortgage advice but brokers having to turn them away because of the lack of available or appropriate products, especially for first-time buyers.
The consumers do not blame or lose their trust in their mortgage adviser because of this – it merely increases their exasperation with the institutions.
Sir James Crosby, shortly before he vacated his position at the Financial Services Authority, predicted the number of brokers would continue to fall.
He said: “In recent years brokers have been the major force for competition in the market, both in terms of extending access and achieving better value for consumers.
“In the face of lenders now offering cheaper deals through their branches, brokers are losing share in a rapidly declining market and many will disappear.”
I am not convinced that consumers are happy to trudge up and down the high street searching for the best deal in the market.
One of the major lessons Sir James and others have learnt over the past few weeks is that consumer confidence in our banking and lending institutions is at zero.
The faceless entity of the institutions which, in recent years have been built on banal promises, poor management, unqualified risk levels and expansion of concepts that transcended competency levels, has been found wanting.
Good mortgage brokers will become the ultimate contracting point between consumer and institution.
In a market built on fear and lack of confidence, the relationship between good brokers and consumers is the only one remaining that can sustain confidence and trust.
The broker, at the contracting point, will become the ultimate weapon of choice for both institutions and consumers to engage in a tripartite agreement.
This relationship has worked well for all parties in the past and will work again in the future but with different terms and conditions in play.
Today, the intermediary broker should be extremely confident about a future that is built on these terms.