"It appears that we are already seeing a significant shift in adviser behaviour when it comes to, what we might deem, ancillary sales."
To say it has been an interesting - and difficult to predict - year would be something of an understatement.
I’m not sure that any of us - at the start of 2023 - might have been able to foresee just how up and down the next 12 months would be, or the rollercoaster ride it would turn into.
Looking back at the year, market issues have tended to dominate headlines, although looking forward perhaps the biggest change to the intermediary market came from a regulatory perspective, with the introduction of the Consumer Duty rules.
At the moment it’s difficult to say just how game-changing or ground-breaking Consumer Duty will be, but it’s certainly obvious that this is a long-term project for the FCA and, as a number of commentators have pointed out, we are at the start of the journey rather than the end.
Where perhaps we might see the biggest Consumer Duty-led shift is in terms of what advisers are expected to review, the product areas they are deemed to have responsibility for, and how appropriate it is - or not - for them to potentially skirt over other customer needs, outside for example, of the mortgage.
My own view is that a ‘silo approach’ to the client is not going to cut the mustard any more, and indeed it appears that we are already seeing a significant shift in adviser behaviour when it comes to, what we might deem, ancillary sales. An area which has traditionally gone in and out of focus for many advisers depending on how their mortgage advice business is going.
I saw some research out of AMI which touched on this very issue in relation to protection, but it seems to me that it could apply equally to any ancillary advice area that a firm may (or may not) be touching upon.
The AMI research of consumer attitudes towards protection, and the advisers that provide such advice, revealed that an increasing number of clients recalled their mortgage adviser raising the issue of protection with them. This number had increased from 36% back in 2020 to 50% now.
Now this might not seem like a major jump forward, but this research took place in the very early days of the Consumer Duty, and it’s my anticipation that - moving forward - were you to keep asking the same question year-on-year, you would see a continued increase in this figure.
The reason being, of course, that there is now an expectation set by the Consumer Duty rules that advisers can’t neglect the needs of their clients in other important areas, particularly protection and how it relates to continued payment of the mortgage should, for example, they be unable to make their monthly payments due to accident, sickness, unemployment, etc.
The link between mortgage and protection is quite clear, but in looking at client’s needs in the round there might also be a very strong argument to suggest that other products and services need to be offered, in much the same vein.
While outside of financial services, conveyancing advice seems like an obvious bedfellow of the mortgage/protection offering, not least because the vast majority of clients will have little idea about what constitutes a good conveyancing service, or where they can access it from, how much it should cost them, and what they are getting for their money.
For clients such as first-time buyers, who have never been through the purchase process before, this need is certainly there, as it may be for those remortgaging who might not comprehend what they are letting themselves in for by simply opting for a free legal service which is for the lender rather than them.
Indeed, without this advice, without pointing the client in the right conveyancing direction, where might this leave the transaction and where might it leave all those who are reliant on it completing in a timely manner.
It’s in everyone’s interest that the client uses a specialist conveyancer who does this work day-in/day-out, is on top of its game, and is used to dealing with all types of property cases. Plus, by doing this, the adviser is also in a way protecting themselves from any issues the client may raise about why they didn’t provide them with conveyancing advice in the first place, should the case not go in the direction they wanted it to.
Overall, covering all advisory bases now seems to be necessitated by the Consumer Duty rules, and whether that is financial or any other advice want or need, it makes sense to ensure yours is a business which does all it can to support clients right across the piece.
