Half of direct consumers have said they felt more secure dealing with a mortgage lender directly, according to research by DPR Group.
In an August survey of more than 1,500 consumers who had recently taken out a mortgage, over half (56 per cent) said they went directly to the lender, with 49 per cent saying they felt more secure dealing direct.
Melanie Spencer, head of MCI mortgage club, said: “We all know the true value of advice and the reassurance this provides consumers in navigating the congested landscape of solutions that will not only meet the needs of each client today, but also into their futures.
“However, it is clear that we need to communicate this both more widely and more clearly.”
Meanwhile, of those who did engage a mortgage broker, half (52 per cent) did so for the “reassurance” that an adviser would help them to choose the correct product, 46 per cent for access to more lenders, and 38 per cent for better rates.
The research also found that some brokers were optimistic about the future of the mortgage advice market.
Three in 10 (31 per cent) believed that 90 per cent of all new mortgage business would come from advice via brokers when looking ahead five years, amid lenders’ branch closures and a growing preference among consumers for shopping around.
The findings come after the Financial Conduct Authority revised its rules and guidance in January to make it easier for firms to present options to consumers without giving regulated advice, and to help firms make execution-only sales channels easier to use.
The changes were introduced after the regulator’s mortgages market study identified consumers looking to buy an execution-only mortgage being diverted to advice as a potential harm.
Ms Spencer commented: “When considering the channelling of consumers towards advised and non-advised mortgage routes, we must really look towards the goal of advice.
“The key goal is reducing vulnerability and providing reassurance for people about to make what is likely to be the biggest financial commitment of their lives. A financial commitment that could have far reaching consequences if incorrectly purchased.
“Therefore, the growth in the number of borrowers going through a broker rather than direct to lender should provide confidence both to the FCA and to future borrowers that the risk of an incorrect product choice is eliminated.”
chloe.cheung@ft.com
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