In a market characterised by innovation and competition, adapting and evolving has always been vital, but the global financial crisis made such progression a necessity rather than a luxury.
Stakeholders from brokers to lenders, from networks to clubs found to their peril that burying their head in the sand and hoping the economic storm would pass was not the correct approach and that, despite a contraction in competition, differentiating their business and standing out from their rivals became more important than ever.
Another integral factor in the development of the mortgage market has been the influence of regulation.
The intermediary distribution channel has undergone huge changes since 2004 when compulsory regulation replaced a hitherto voluntary code of conduct and the industry as a whole benefitted from the increased professionalism the new legislation brought about.
Mortgage brokers evolved to cope with the transition and networks played a key role in guiding their appointed representatives through the changes and offering compliance support. GI-Day and A-Day came hard on the heels of mortgage day as other pockets of financial services looked to increase their own levels of consumer protection and the mortgage market review’s implementation in 2014 will be another step change for the home loan market that will force all stakeholders to evolve once again.
The mortgage market may have the best part of 18 months before its next major upheaval, but the RDR is set to revolutionise the way other financial advisers – and a whole host of networks – operate from January. The retail and investment planning sectors are gearing up for a shift from commission to fee-charging models and have spent much of this year preparing for the new regime. For those whose focus is on mortgage and protection the RDR will have a minimal impact on their day-today operation. But networks that count holistic advisers or IFAs in their ranks could be affected, as too those where there is significant movement between the product areas that intermediaries choose to focus on if they find that their investment business tails off after January.
There have been suggestions that the financial services sector could see advisers that previously operated in the investment arena try their hand at home loans or protection, but the fact remains that mortgage brokers themselves are hardly inundated with new business at present. This is one of the many reasons that the role of the mortgage broker – and therefore their networks – has evolved over the past few years. Very few intermediaries are able to rely solely on mortgage business anymore and many have diversified their operations to include complementary offerings such as protection and other insurance services.
