As we move towards the end of the year, it’s natural to review the successes (or otherwise) of 2019, and – if you haven’t already – start planning and preparing for what might be coming over the horizon in 2020.
A new decade in fact – will these next 10 years be deemed the ‘roaring twenties’ as 100 years ago? Given the political and economic uncertainty, the only current roaring I can hear is that of a nation which still seems incredibly divided on the one major issue which continues to impact on everything else.
In 10 years’ time, will Brexit and departing the EU have continued to dominate the discourse as it has done for the last four years? It would not surprise me, especially given that any immediate ‘deal’ to leave is really only the start of how we define our future relationship with the EU. A huge amount of hard work undoubtedly remains – if you’ll pardon the pun – to be done in that regard.
But, what of our market and where does it move next? While we might not feel the ‘Brexit effect’ so intensely as other sectors, there’s no doubting that it is currently impacting on the housing and mortgage markets. I would certainly hope that we can get relative certainty very quickly next year, because I suspect there are a lot of home movers/new purchasers, etc, who are waiting to get into action.
And clearly for advisers it will be important to be prepared for any groundswell of demand that makes its way to market. I think we all want to see intermediary share of business not just maintain its current level but kick on. This can be achieved but it is undoubtedly going to need a concerted push in terms of educating borrowers about the benefits of advice, especially if as some believe, we see lenders become more aggressive in their pursuit of direct/execution-only business.
In a way, it is this focus on execution-only that has perhaps defined the mortgage market in 2019, certainly from a regulatory perspective with the publication of the FCA’s Mortgages Market Study Final Report, which appears to be attempting to create an environment in which lenders can conduct more execution-only business, or perhaps simply justify the levels they are already writing.
I, like many others, do not understand this direction of travel and in my view it is not the job of intermediaries to give succour to those who might think execution-only is the right way for borrowers to access the mortgage market.
It’s why I find reports that some advisers are asking lenders if they can conduct execution-only business with them, rather hard to believe. Why would you effectively compromise your position with a client? Aren’t you effectively requesting your own demise? If this is happening, then I am having difficulty at fathoming the case that is being made for such a business ‘partnership’.
We should not be undermining the advice process, but promoting it, and I can’t think of a single Stonebridge member firm, or indeed individual adviser, who might believe this is a good route to be pursuing. While it might be something the online operators are exploring, those who are fully immersed in the advice process and what it can deliver to clients, would surely baulk at it?
What this perhaps does highlight are the challenges that remain for mortgage advisers and how the demands placed upon them, both by the regulator and market conditions, are only likely to grow. Having quality support and technology in place from a strong network partner could well be the difference in allowing you to grow a business, making sure you access all the opportunities, whilst at the same time ensuring your firm is in the best shape possible to counter any potential and emerging threat.
We certainly provide our member firms with this, and I’m sure there are large numbers of advisers out there who will be seeking similar levels of support in the future in order to make sure their position isn’t compromised in the slightest. The good news is that the fundamental drivers of the wider economy and the needs of consumers continue to work fully in advisers’ favour. Making the most of this while preparing for whatever the future might bring, is the next challenge.
Rob Clifford is chief executive of Stonebridge