BestAdvice’s recent virtual roundtable saw participants consider how the coronavirus crisis could bring about permanent changes to business practices.
Keith Richards, CEO of the Personal Finance Society (PFS) and board member of the Society of Mortgage Professionals, discussed the decision last week by the Equity Release Council to change the requirement for equity release customers to receive legal advice in a face-to-face setting.
While the Council has stated that its move is temporary, Richards welcomed the decision and believes it could last longer.
He said: “I think it’s perhaps going to change the way that we do business forever after this event. With vulnerable clients, you need other parties involved such as legal counsel, but now it can all be done remotely. Now you can invite other members family to be present at the virtual meeting, whereas in the past it would have always had to have been done face to face.
“What will come out of this is a change the way we do things. It’s certainly having a positive impact on the way that we’re engaging with the regulator at the moment, thinking about some of the rules that we have got in place which add little value. They need to be relooked at and modernised. I think more of that is likely to come on the back end of this crisis.
“There have been a lot of things that we’ve maybe not put into practice or have done reluctantly; now we’ve had to do them because there’s no other choice. Why let that stop? Why can’t we continue that after the lockdown is over?”
Sebastian Riemann from Libra Financial Planning suggested that the ‘back to basics’ approach that the Covid-19 lockdown has forced upon advisers could continue afterwards.
He said: “I can see the market being bit more refocused on the fundamentals, away from ‘robo-advice’, where the importance of the adviser is that much greater in a changing market, especially with lenders changing criteria and rates. Just staying on top of things and explaining things to the client is really important right now to have their confidence.
“I think we’ve almost taken a few steps back in terms of the technology side where the execution-only argument has disappeared. Clients really need their advisers right now more than ever and with the changes in areas such as the adverse market and values of properties, it could have quite a lasting effect depending on how things look once we go back to normality. Going forward, there will be a lot more focus on clients having those in-depth conversations.”
Dale Jannels, managing director at Impact Specialist Finance, thought the role of the lender business development manager (BDM) could be under threat.
He said: “I think it all depend on who the BDM is. The standard BDM who has got to do six appointments every single day without fail, otherwise they get reprimanded and so on, I think they’re a dying breed unfortunately, especially in the current climate.
:If you can have a bit of persuasion with the lender about actually getting something through – it needs to have a little nudge or a kick to get over the line – then I think they’re still worth their weight in gold.”
Richards believes mortgage advisers should look at the way investment firms have changed over the years.
He said: “The investment world has turned into an ongoing service-based relationship rather than a transactional one, which is, of course, where the mortgage market very much is. There are many intermediaries who have now understood how they’ve under-utilised technology.
“What they’ve realised is that sometimes they almost felt obliged to have to go and arrange a meeting as part of their annual review, whereas actually they could have done it far more effectively through remote means. Because they’re finding more clients who now are using Zoom or other technologies for the first time, actually they’re quite enjoying the interaction, which is slightly different from a phone call.
“So whether or not we will get a bit bored with that fad and then actually want to get back to [face-to-face], it’s definitely on my wish list for when this is over. It’s about how you increase the accessibility of professionals by use of technology, not diminish the value of what they provide.”
He added: “One of the things that we’ve always grappled with is how we turn the mortgage sector away from the transactional side to also having embedded value. So things like general insurance and protection products that actually provide a far greater degree of stability when you end up with environments like this. So I think one of the things we’re going to focus on again is how do we really help the sector move into a more holistic advice around other areas that create that embedded value, that the ongoing remuneration, without the need for simply arranging mortgages only?”