"Non-standard needs and circumstances often see them move off that particular road into the arms of an adviser that can sort the wheat from the chaff"
Clearly, there are digital mortgage advice propositions that have made some considerable ‘noise’ in recent times, and as mentioned above, it’s been interesting to see how the industry reacts. At the recent FSE Wales exhibition in the Celtic Manor Resort, the expert panel debate covered off this topic and you can learn a lot about a sector by how the question was phrased. “Do you see the rise of digital mortgage advice offerings as a threat?” was asked of the panel, and I suspect this taps into a underlying perception from some that the advisory proposition is one ‘Uber’ away from oblivion.
For what it’s worth, I don’t believe that for one second, but when you are a business which for example has a lot of face-to-face advice, and with much talk about people’s urge to transact more of their financial affairs online, then you might come to the conclusion that it’s just a matter of time. However, the important point in all of this – as the panel pointed out – is that as advisers we recognise the technological advances and, where possible, work them into our own propositions rather than sitting idly by and watching others take our business. And by ‘others’ I don’t simply mean digital offerings; I also mean those advisers who are able to see the advantages and work them into the proposition.
It was interesting to see the panel members concur with a lot of the above, and to also hear how the increased complexity of the mortgage market actually aids advisers rather than the digital apps/platforms. As was pointed out, this type of technology copes very well with ‘vanilla residential cases’, and it may well have a big future in growing business levels with borrowers who fit into this box. But, increasingly, we are seeing more and more people fall out of that box and into a much more complicated and complex financial space, which can’t easily be dealt with by a tick-box advice mentality.
Not only do we have individuals with more complicated financial circumstances but we also have far more complicated mortgage needs that need to be addressed, and again the ‘human adviser’ is best placed to deal with these, also utilising the required technology. One panel member acknowledged that borrowers might start their mortgage journey on a digital advice platform, but that increasingly non-standard needs and circumstances often see them move off that particular road into the arms of an adviser that can sort the wheat from the chaff, in a way that apps and the like are currently unable to do.
So, does this mean that the days of digi-mortgage advice platforms are already numbered? Well, absolutely not. And those that think this is simply a fad, one that will fizzle out taking a number of firms who have utilised large marketing spends with them, can probably be accused of wishful thinking. Just because there won’t (in my opinion) be large numbers of borrowers who want to transact their single, largest financial commitment over their phone or tablet – with no human interaction – doesn’t mean that a market doesn’t exist.
The million-dollar question is whether there are enough people who will do this? Maybe, maybe not. I do wonder however if these propositions won’t eventually cut their cloth accordingly – already we’re told that many of them have an online sourcing element at the front-end but that following this, the application stage is often taken offline via telephone and the like. Perhaps they’ll see that this is actually the right model to take forward – after all, many people (as mentioned earlier) go online initially to get an idea of what’s available and then move to the advice/adviser element. If you have these people online and on your apps/sites, then moving them on to your own advisers is going to be much easier.
So, while a 100% digital advice proposition perhaps doesn’t tick all boxes for the vast majority of people – especially when you add in the individual’s/product’s complexity – you might find that a slick hybrid option does. And then of course you may well find that this type of disruption can hoover up considerable amounts of business. The good thing however is that most established businesses can do this now, let alone replicate it from others. Make the most of your current position, add in the technology, and you’re already ahead of the game. The tech revolution can work just as much in your favour, as anyone else – just make sure you’re up to speed now, rather than playing catch-up later.
