91% of mortgage advisers feel they are either prepared or very prepared for the new regulatory requirements of the Mortgage Market Review (MMR).
Intelliflo’s MMR research found that 72% of advisers believe the changes will be positive for their business.
Despite the overarching optimism surrounding the reforms, 34% of mortgage advisers listed increasing administrative burdens as their biggest concern post April 26th, with 11% worrying that the MMR will negatively impact sales. Other concerns included an increase in compliance costs (6%) and longer working hours (5%).
Whilst the majority of the MRR’s regulations are aimed at lenders, mortgage advisers will be required to carry out detailed scenario planning and ‘rate shock’ tests to illustrate customer affordability before cases are passed to the lender for approval. In order to prepare for these new requirements, the survey found the most common changes that mortgage advisers have implemented are to process (20%) and training (28%).
Spending on technology has been relatively low to prepare for the regulations, with 72% of advisers having spent £3,000 or less, and 4% spending up to £10,000. Despite this, 94% of mortgage advisers are confident or very confident that their systems will allow them to evidence compliance post the MMR, illustrating that effective technology in this sector can be low cost.
John Penn, head of mortgage proposition, Intelliflo, said: “The main impact that the MMR will have on mortgage advisers will be the increased need for audit trails and detailed documentation to illustrate that specific checks and conversations with clients have taken place. It therefore makes sense that our survey found advisers’ biggest concern to be around administrative requirements.
“The right technology systems can help to alleviate these admin burdens, speeding up processes, improving accuracy and reducing unnecessary duplication. Mortgage advisers who don’t plan to use technology to deal with this increased paperwork run the risk of having to put in extra man hours to ensure profitability doesn’t falter and to maintain the amount of quality face to face time they spend with clients.”