Consider the situation should we not have technological solutions available to our industry? How would we cope with the changes required by next year’s European Mortgage Credit Directive for instance? The simple truth is that the sector, and advisers themselves, would find it a very difficult ask without the support of case management and sourcing systems.
I’m therefore a great believer in the power that technology can deliver to advisers and the help it can provide. One area in which I’ve been taking a keen interest, particularly because of the regulator changes and the ramifications of it, is the secured loans marketplace. This is a sector which over the next eight months or so is going to see some considerable change and developments as it is brought under the auspices of the FCA and it also has to figure out its place in the world, particularly given the responsibilities of advisers when it comes to discussion and advice on these products compared to remortgages.
You will also no doubt have read about the various disclosure changes that will be introduced from March next year with advisers needing to issue an ESIS document rather than a KFI, although there is an option to issue a ‘KFI plus’, and this means some fundamental changes that will need a technological solution.
It is these developments, and the need for a greater secured loan (and wider product) comparison tool, that appears to be driving forward a recent glut of secured loan sourcing systems. Indeed, throughout the past few months you will be forgiven for thinking that every master broker, packager and distributor in this space has launched their own secured loan sourcing proposition. It’s not quite at this stage, but it’s not far off and with this being the case and advisers having a number to choose from, one can’t help feel that this could be a very confusing time if you are looking at the various options.
The confusion is probably not helped by those launching their tools – and you can’t really blame them for this – suggesting theirs is at the cutting edge of technology, does everything an adviser wants and then some, and being the only one worth having. We know for a fact that they can’t all be telling the truth and we also know that advisers are going to be reticent about the one they use because undoubtedly they will want it to dovetail with their wider existing CRM system, and the sourcing tools they may already use across other product areas, notably mortgages.
Given the MCD requires mortgage advisers discussing remortgages to actively make the client aware that other alternatives exist, namely secured/unsecured loans/further advances, etc, then it would make sense for them to have a system which can be patched in and help them source across all those product areas, pulling in the necessary credit data and present the options across the entire piece. A client presented with all those options and costings can make a much clearer decision, and they will have a real view of whether they are acceptable to the lenders offering those products.
I firstly suspect that not all the systems available are going to be able do this – indeed do they actually cover off unsecured and further advance options at all - and I also anticipate that securing that all important integration with the existing systems the adviser uses is also not going to be possible for many. I wonder how many of these systems are simple secured loan product option displays and not actually true sourcing technology that will provide the broker with exactly what they need in the new MCD environment.
Advisers are going to need systems which provide a true comparison picture and ones that actually work on the basis of the credit-worthiness of that client. If they’re unable to do this with any certainty, then they’re really not going to cut the mustard. Treating customers fairly has to be a prerequisite for advisers (and networks) considering their next steps in terms of partnerships and technological requirements – I would advise practitioners to think very carefully about whose basket they place their technological eggs in. We certainly will be.
