Look out for more talk on regulation in 2012 and an increased focus on cross selling, writes Phil Whitehouse, head of TMA
We start the New Year in uncertain times, not knowing whether the Euro will last the year, what new developments or crises will occur in the Eurozone or what effect it will have on our own market.
If it were possible to take the Eurozone factors away, 2011 was a pretty positive year for mortgage intermediaries all considered. The brokers who are still active in the market seem to have changed their business models and sales process and managed well the threats from those lenders who choose to deal direct with the consumer.
In fact while few would admit to having an easy year in 2011, many expected much worse, and several brokers I’ve spoken to reported having more clients and being much more geared up for cross selling opportunities. For those who have altered their business models in this way 2012 should be no different but the need to create even better efficiencies and reduce costs may continue to be ever present this year as it has been for the last two or three.
The Mortgage Market Review looks like it may actually make its way into the regulatory framework this year after the FSA published its latest consultation paper just before Christmas. It is increasingly likely that, in addition, new rules may also emerge from Europe, although as tensions rise in other areas of the Eurozone there are also signs that mortgage regulation may take a back seat for the time being. However more regulation seems as inevitable as the tide coming in and out so our only option is to embrace regulation, and use this as a means to find the positives and to win and increase business from other brokers who may not be able to take advantage of these market opportunities.
There was an increasing focus on fraud last year, especially from business introduced by unregulated third parties, it is an increasing warning to make sure that your due diligence and compliance checks are up to scratch so that you cannot be used as a pawn by others who are more unscrupulous.
The buy-to-let market re-emerged strongly in 2011 with new lenders coming into the market and the prospect of more entering in 2012. Buy-to-let could therefore present numerous opportunities this year and those brokers not already in this market may do well to make sure they have the skills to take advantage of the increasing opportunities.
Similarly over the last couple of years, most of the brokers still in the market have embraced selling a range of products in addition to mortgages including life assurance and general insurance. With a tough mortgage market these other sales are likely to make up at least as much of a broker’s income as mortgages do in many cases. It may make life more challenging for a while as many of these ‘new’ products require different sales skills to those required for mortgages and so many brokers may need to brush up on their skills by attending training sessions, but doing this will pay off as those with the most versatile sales skills will be the ones who are the most profitable in our changing environment.
As the shape of the distribution market continues to change and the amount of regulation looks set to increase still further with potentially additional regulation both from the FSA and from Europe, directly authorised intermediaries may find and increasing benefit from being aligned to a leading mortgage club and likewise appointed representatives from being a part of a leading and supportive network.