The way forward for networks: no alarms and no surprises
‘What you see is what you get.’ ‘Does exactly what it says on the tin.’
These idioms are used in common parlance to indicate that you will not get any surprises with this individual, service, company, product, you name it.
It is effectively a guarantee of transparency and, to my mind, there should be a lot more of this in the network world. For too long, I have heard the over-arching criticism levelled at networks that a) we are all the same, b) we make it up as we go along, particularly when talking about charging, and c) we are interested only in profiting, not supporting, our appointed representatives.
While I could give you plenty of examples of networks that have fitted this particular mould over the years, I would hope those operating today are doing their level best to distance themselves from these perceptions. We certainly are.
However, news from one particular network that it will be deducting a fee percentage from advisers who charge their clients, in order to improve the network’s IT infrastructure, suggests this may not be the case.
Needless to say, it has not gone down well with that network’s ARs. After all, you might think these ‘extra costs’ would have been known about for some time and perhaps could have been met out of the network’s (dare I say it) reserves. Indeed, dropping such a cost out of the blue onto members, especially when ARs have signed up to a proposition not expecting this, may seem like a step too far.
Having been in this market for many years, I think we are all acutely aware of the value of certainty, especially when it comes to network charges for ARs. Our focus has been on keeping it simple with no hidden surprises, which means firms can plan and prepare for the future based on known costs.
It also means the network can do the same, cutting its cloth accordingly and working to that plan. In my view, no alarms and no surprises is the way forward for the network marketplace. Others, it would seem, are happy to disagree.
Richard Adams, Stonebridge group
As FTB deposits remain high, is Help to Buy momentum tailing off?
How do we measure progress in the first-time buyer market? Is it better to look at recent lending statistics from the CML, for example, and judge the mortgage market for first-timers on a monthly or yearly basis? Depending on which tack you take, your conclusion about progress may vary.
Taking an annual view, the figures for November 2015 seem fairly positive. The volume of first-time buyer lending grew by 10.3 per cent, to £4.2bn, while loan numbers rose from 25,300 to 27,900.
These are reasons to be cheerful, and proof, some may suggest, of the growing recovery in first-time buyer activity. But add in October’s figures and you may think otherwise: lending in that month eclipsed November with £4.6bn from 30,300 loans.
Is this a sign that some momentum generated by Help to Buy is starting to tail off? One of the key measures we always look at is the average LTV of those first-time buyer loans. In that respect, there has hardly been any change within a year: back in November 2014 the average was 83 per cent; now it is 83.5 per cent.
So first-timers are, on average, putting down 16.5 per cent in deposit money. Add in the fact that house prices have increased over the past year and we can probably surmise that first-timers are still having to put down large sums of money.
Given the focus on Help to Buy and, initially at least, the greater levels of high-LTV product availability, you might have anticipated this deposit requirement getting less and less, but it has simply stayed there or thereabouts. This may be because first-timers have the means to put down bigger amounts and want to do so; or it could be that marrying deposit requirements with the still relatively small availability of high-LTV lending means that only those with access to these larger pools of money can get on the ladder.
It all means that fulfilling the Government’s pledges on increasing first-time buyer activity still seems some way off. Building the homes required is one (major) issue but so is access to finance. Without the latter, prospective first-timers are likely to remain just that.
Pad Bamford, Genworth Financial