The modern broker faces many issues in this post-financial crisis but pre-Brexit world. Huge uncertainty remains given the prolonged period of low interest rates that means almost half of mortgage borrowers have never encountered an increase.
We still have a fragile housing market subject to government stimulus intervention via Help to Buy, at the same time as taxation changes designed to control what some regard as exuberance in the second-property and buy-to-let market.
The Financial Policy Committee is working to control property prices and limit lender risk of loss exposure. The changes to landlord taxation have yet to bite and alterations to the counter-cyclical buffer for lenders have still to impact their capital positions.
There has never been a time when consumers needed more information, help and advice in order to achieve a positive outcome from their property transaction and funding.
And, while the majority still express a desire for the advice element to be delivered face to face, or at least by a person they can speak to, many consumers will want to engage via technology. Firms need to ensure they have begun to embrace it to avoid being isolated from the demand for advice.
That said, recent research indicates that many firms deem it a step too far to have a website combined with LinkedIn, Facebook and a Twitter presence.
Nowadays, savvy consumers expect to be able to find online the firm they are considering doing business with. Indeed, many will regard an online fact-find, application and document upload capacity as the bare minimum consistent with their experience in other markets.
With the delivery approach of Rightmove and Zoopla, the Land Registry’s imminent move to online title transfer and the case-tracking visibility of many conveyancing firms, a new level of expectation is being set in our linked markets, never mind others.
Our lender partners are investing huge amounts into their ability to interact with their (our) customers quickly, efficiently and, at times, when they want to trade. It has long been the broker’s edge that we will work the hours for the business but that may soon not be our unique selling point.
It will not be enough to expect lenders to ‘play fair’, and the impetus to write to their customers earlier and earlier to offer retention products is in their direct commercial interest. All brokers can fairly ask for is access to the same products, at the same time, at the same rates, and to be paid a fair amount for the work done and the duty of care for the advice provided.
Lower unit cost
Investment in new technology that simplifies the processes and transactions reduces the unit cost for lenders and should speed up things for all involved. The plea for our sector must be to not stand in the way of progress but ensure we are at its heart.
Lenders must build their new technology propositions with the broker option present from day one. For our part, firms must look at how they work with technology to ensure great customer outcomes.
We will soon see more systems coming to market that will help brokers match customer profiles and needs with products: criteria-based matching systems that can then be used with more traditional sourcing systems to ensure the best price.
The advent of Open Banking standards will give consumers more control over their data and the ability to shop around more easily. Having software that interfaces into this space will be crucial.
The battle between app-based approaches, which may work for initial enquiries and early data gathering, must switch seamlessly to the more traditional web-based portals for more complex and secure application and offer elements. I am sure advice will remain a human thing, with the delivery of full algorithms that are truly advice being at the margins with significant risks. True robo-advice is a long way off.
What is certain is that the firms, networks and lenders that get this right will have the most sustainable businesses in the future. Those that choose to ignore or avoid the advent of technology in its widest form will struggle as consumer habits change.
Robert Sinclair is chief executive of Ami