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Will robo-advice ever replace mortgage brokers?


Is robo-advice capable of meeting regulatory requirements and emulating brokers’ ability to gauge a borrower’s situation?

Recent intermediary market share growth can be attributed to a number of favourable factors. These include lenders putting more products to market, which in turn has increased the need for broker advice, as well as the requirement for lenders to ensure their staff can advise potential customers, which has steered many towards entrusting roles to independent advisers.

Given the scale of regulatory change, it is little wonder the industry has not yet introduced radical technological updates. Indeed, while many consumers are now accustomed to price comparison sites and making applications online, the unfamiliarity with, and complexities of, making a full mortgage application online have deterred most from going there.

But this is changing. The industry is gearing up for automated advice in more complex decision-making scenarios beyond the current simpler processes such as reminding existing customers to switch lenders once their fixed rates come to an end. With artificial intelligence, borrowers could potentially chat with a digital adviser, which would then suggest the optimum solution.

For this to become a possibility, however, robo-advice has to be a real improvement on what we have at present and fully meet regulatory requirements. Even then, there is considerable doubt whether a machine can replicate a broker’s ‘human’ ability to gauge a borrower’s situation.

So for the moment we are more likely to see a close relationship between humans and technology, as lenders and brokers invest to combine the best of both worlds in the advice process.

This is not to say that, in five years’ time, we will not have seen a considerable shift – but it is going to be a case of evolution rather than a robot revolution.

Peter Williams is executive director of the Intermediary Mortgage Lenders Association


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  • Chris Hulme 11th February 2016 at 4:50 pm

    The reality of mortgage sourcing technology at present is so woeful it cant source the simplest of cases with any real degree of accuracy.

    Once the phones calls to BDM’s, affordability calculations, criteria checks on lender websites have all been followed up it is rare to choose the product/ lender option that occupies the top slot on a sourcing table.

    Add to this “broker experience and knowledge” about lenders current service levels and underwriting attitudes towards certain employment types, occupations, and those grey areas of criteria today’s technology is still ZX81 compared to where it needs to be to replicate a face to face broker.

    It doesn’t matter which sourcing system or provider is used, none of them can claim to have this in the bag. As yet, none of them will take responsibility for the information they provide to brokers so how can they confidently make any such claim to a regulator or client.

    Until the broker market has a reliable sourcing service that is answerable to the broker for its errors and omissions (of which there are currently many) robo-mortgage-advice is a very long way off!!