If brokers can provide the same level of service as big lenders they will “win” the battle for clients, according to managing director of Coreco Andrew Montlake.
Speaking at the Mortgage Business Expo earlier this week (October 16), Mr Montlake said brokers could provide two fundamental aspects of the consumer journey that lenders and aggregators could not — advice and choice — and therefore if they could provide the same level of service as those other firms they would “win through every time”.
According to him, although getting an application to offer “real quick” was important, it was the customer journey that needed to be better and easier.
In order to do this brokers needed to embrace technology so customers could have a “modern” experience with their application — such as checking online for real time updates rather than ringing their broker — and work with lenders to help open banking and API technology to improve the application process.
Mr Montlake said: “None of us want to be a Blockbuster when we can be a Netflix.
“Clients want updates wherever they are, any time or place and in any form. We know change is coming.”
He also thought brokers needed to embrace social media to improve their client retention and the way they gained new clients.
He said: “It’s all about the testimonials and word of mouth. Getting a recommendation has always been a good way to get new clients but now, it’s like that on speed.
“With social media, a simple testimonial on Facebook can bring seven or eight new consumers to your door.”
Part of the reason brokers needed to work even harder to provide clients with good service was because the Financial Conduct Authority was opening the door for execution-only, Mr Montlake warned.
In its consultation on mortgage rules out in May the FCA proposed a shake-up of the rules designed to increase access to execution-only products after it found consumers were being "unnecessarily channelled" into advice and were still not necessarily getting the best deals.
Its evidence showed almost all new customers were diverted into an advice route and the regulator suggested there would be some consumers looking to take out simple products that may not need advice.
The regulator proposed scrapping the “interaction trigger” for advice — which previously stated any customer which has a face-to-face interaction with a lender should be channeled into advice — and allowing sort and filter systems to operate outside advice rules.
Mr Montlake said: “The FCA seems to be making their way to allow and promote execution-only.
“Is direct to consumer a good thing? In a lot of ways, I don’t think so. I think it could be quite dangerous.”
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