FR: You recently joined TMA - do you have any plans for the Club yet?
TMA has come a long way in the last year. Our focus is very much on giving something back to the advisers who use us. This is a core part of our offering, and we are making sure that our proposition is where it needs to be to support a diverse range of DA businesses and advisers.
With a growing number of new staff in place, and as good business practice, we are taking the opportunity to review the whole TMA proposition. This includes our mortgage and protection panels, our general insurance offering, conveyancing and our comprehensive compliance support function.
We are doing this to ensure that we are the best in the market in every way. We have already increased TMA staff head count by 30% in the last three months and we plan to further increase both the sales team and our mortgage help desk staff. Both of these things are designed to provide a better broker experience.
FR: What changes have you seen in the DA mortgage club space recently, and what can we expect in 2016?
From a TMA perspective business is increasing month by month, as are new enquiries to join the club. As a result, we have bolstered our team of key account managers to manage this growing number of relationships. We foresee both of these continuing throughout the year.
It is obviously important for all advisers to be aware of the forthcoming regulatory changes, particularly around MCD. We have seen a growing number of DAs look to us for both updates and help on compliance. The clubs that offer the best compliance support will be the ones to really flourish. The key will be how easy each club makes it for advisers to access the help they need in a whole variety of areas. It is now about so much more than just who pays the best proc fee – although of course that is still of interest to the adviser!
The positive for DAs is that they have the flexibility to move quickly in response to changes in the market and make their own decisions, so, for example, when the MCD is in place, they can choose whether or not to give advice on second charges and use a master broker to package the case or use the master broker to give advice.
FR: Are you seeing an increase in products aimed at consumers who don’t fit standard lending criteria, and is this a trend you see continuing?
The specialist sector is definitely a very active part of the mortgage landscape at the moment and there continues to be innovation propelled by the number of new lenders entering this space. There are more lenders coming into the market all the time and each one tends to look at an area outside of the mainstream so there are an increasing number of solutions to the more complex cases.
There are still many new lenders awaiting registration by the FCA so this is only going to increase and with it I see lenders being more creative with their products. As the competition increases, this will also drive rates down on non-standard mortgages which has to be good for borrowers.
FR: With an increase in FTB numbers, do you think more brokers need to be thinking about including protection as part of their service?
In my opinion protection should be a mandatory part of the advice process. Everybody has seen the various statistics around the protection gap and I believe that there must surely be a moral and legal obligation to protect a client against any known debt.
This should not just be for first time buyers but everybody taking out any type of loan. With a growing BTL and rental market, tenants also need to be protected especially with income protection and events such as illness or redundancy. They are no less likely to suffer from illness or redundancy than an employed person. This sort of product protects both the landlord and the tenant, so it is essential that advisers talk to every client about protection, regardless of whether they go on to do the mortgage for them or not.
FR: What trends do you expect to see in the mortgage market over the next 12 months?
Demand from borrowers looks like it will increase all year. We have seen strong activity in the buy-to-let market although it will be interesting to see whether this levels off after April’s stamp duty change.
I do not expect to see any movement on interest rates at all this year but I do expect the mortgage market to continue increasing in size and for the share that goes through brokers to continue to grow beyond its current level.
Ultimately this year I think we will see more lenders, more products, more choice and more innovation and as a result I expect to see lenders’ risk appetite relax somewhat and an easing in criteria. After the MCD, although it will take some time, I also expect second charge loans to increasingly become a part of the mainstream mortgage offering.
