"Next year, advisers will predominantly be looking at remortgages and product transfers. "
We spoke to Martin Reynolds, CEO of SimplyBiz Mortgages, about what he predicts for the post-Brexit purchase market and how ancillary products can help boost business.
FR: What challenges are you seeing that are currently impacting brokers?
There are a number of challenges facing advisers at the moment. The purchase market remains slow, and even post-Brexit, I do not feel it will grow much over the next 12-18 months. This means that next year, advisers will predominantly be looking at remortgages and product transfers.
However, in the past two years we have seen many firms advising clients onto five-year fixed rates. Again, managing their back book will be key. Product transfers will become an interesting market, as some lenders will look to move the balance back towards themselves.
Advisers using CRM systems need to ensure that clients are contacted in advance of their current deal ending. For me, in this instance, one timeline does not fit all. Advisers need to be aware of how long before the end of the deal lenders make contact. Many lenders have different timelines, and these needed to be factored into their CRM system.
We are also seeing completion times extend, so advisers need to be aware of how this could affect cash flow.
The final challenge is time. The number of active advisers is still well below the 2006/07 peak, yet mortgage volumes including product transfers are above the 2006 high. Having time to pro-actively manage their client bank will be one area where all advisers will need help.
FR: How can ancillary products help boost business and provide a more holistic service?
The use of ancillary products over the next few years will become an integral part of the client contact strategy. With the realignment of client banks to more of a 5-year profile, the use of regular general insurance and protection reviews will provide yearly opportunities to make contact with clients. Using ancillary products can also help advisers remain in control of the process.
The challenges that free legal schemes have faced are well documented. Using the cashbacks that many lenders now offer on products allows advisers to choose conveyancers that are more attuned to client needs as they will act for both parties.
Many lenders now either use AVMs, or offer a free valuation in which the client does not see the report. Offering survey referrals as an ancillary product not only shows an understanding of client needs, but also offers an income opportunity. Buying a house remains the biggest purchase for the majority of the population, so it is essential for a buyer to have sight of the property survey, if only for peace of mind.
FR: What is the importance of continued education for brokers?
The market continually moves – new lenders enter the market, criteria changes on a regular basis, and there always seems to ongoing activity in relation to regulation. The need for expert knowledge of this, coupled with a full understanding of the protection and GI market, makes it clear that the breadth of knowledge that an adviser needs are vast.
There are many ways for this information to be delivered, be it face-to-face, through webinars or via written communications. We offer approximately 90 events during a calendar year in many different formats to aid member learning, and these events still seem the most popular. However, the type of event has changed, and the way in which advisers wish to interact has changed. As well as face-to-face events we also offer online learning opportunities via webinars our MI Live broadcasts and also through our online Special Delivery magazine.
FR: What are SimplyBiz’s main aims or focuses for the rest of 2019? Do you have any exciting news or plans you can tell us about?
We currently have two main focuses; to continue to deliver the events we have planned for this year to members, and plan for the 2020 events programme. The second area is centred around working with firms to ensure that they are ready for SM&CR, which goes live in December this year.
FR: If you could see one headline about financial services in 2020, what would it be?
The one headline I would really like to see is 'FCA Positively Reviews MMS Outcomes Post Industry Feedback'.