But a high proportion of mortgage brokers appear to be blissfully unaware of what is going on or how the recession will affect their businesses. This was the conclusion I came to after reading the results of a recent survey by Alliance & Leicester of brokers who use the lender.
Among other things, the survey asked a hidden gem of a question – “To what extent have you started to extend your business beyond mortgages in light of the current mortgage market?” The responses may surprise you.
Of those surveyed, 47% said they had extended their knowledge and permissions to encompass a broader range of products but a staggering 41% said they had no plans to extend their product ranges.
Interestingly, there was a North-South divide. In the South the percentage of respondents who stated they had no plans to extend their product range was 38%, while this figure shot up to 52% in the north of the country.
I have no idea why this should be but it is an interesting dynamic to consider. I suspect it is symptomatic of the type of adviser who emerged during the past decade while the lending boom was in full swing.
As demand continued to grow, more and more brokers got into the industry with little or no experience, armed with little more than a professional qualification and a subscription to a mortgage sourcing system.
Many of them had never experienced a difficult market, nor had they developed their sales skills. In fact, they were simply order-takers in a buoyant market.
Those who remember the last recession will know that it was the advisers who learnt to sell who survived.
Now that we are in another recession and the mortgage market has fallen off a cliff, advisers who excel at customer service by going back to the basic principles of selling will survive while the order-takers will go out of business. We are already seeing examples of this.
The A&L survey highlights what many of us already knew – that many brokers won’t survive the current downturn because they don’t know how to.