There are many ways to judge a maturity of a mortgage/lending-sector and there are also plenty of ways in which we might also say that a level of maturity hasn’t truly been reached.
For instance, perhaps maturity can be judged on lending volumes, or product availability, or product innovation; perhaps it can be judged on customer cut-through and understanding, or take-up, or more mainstream players making their play in the sector.
And then we have regulatory and/or government engagement with a sector – what level of intervention has there been, how are practitioners regulated, what standards do they have to meet, how has training and competence measurement changed. The list goes on.
In a very true sense, and judged on all those measures, the equity release/later life lending market has undoubtedly matured and with that maturity comes an expectation of what it is able to achieve, what it should be responsible for, and what it might wish to do in the future.
And certainly we might also say that as the sector has ‘caught up’ with others within the mortgage market, so have our clients and customers become more savvy and knowledgeable about the products available, the advice they should be getting, and rather importantly, where they should be going for that advice.
Don’t get me wrong, there is still a lot of work to be done in terms of improving the sign-posting of advice to those homeowners who would benefit from the product(s) and indeed there are plenty of potential customers out there who do not understand how the product will work for them, but we should also recognise that customers are more engaged with the advice process and want to ensure they get the right advice.
I’m spoken to a number of advisers recently who’ve talked about a customer base much more willing to shop around when it comes to the advice they are seeking. It looks like customers are much more willing to seek that ‘second opinion’ or, at the least, to engage with more than one specialist later life adviser to ensure they are covering all bases.
Again, that appears to be a further sign of a more mature marketplace – that customers are aware there could be differences in terms of advisory expertise, knowledge, access to products/providers, etc, and they want to ensure they are getting the very best.
For advisers of course this ups the ante in terms of their ability to ensure they secure the advice ‘job’ after the initial conversation, and that they can move through their process, give their recommendation, make the completion and ultimately get paid. How confident are you that an initial enquiry ended up going nowhere because of the perception of your service and what you could achieve? When it’s a significant decision with financial implications, customers are likely to carry out their research, conduct their due diligence and then make their choice. Was your service found wanting at that stage?
If you have a nagging doubt, you should really think about how a customer might view your service, your credentials, the presentation of your business online, for example. It’s really important to put yourself in the shoes of a customer shopping around to make themselves think about how you project your services and professionalism out to the consumer.
Competition of course is to be welcomed – more advisory options for clients is another sign of that sector maturity and it should hopefully keep everyone on our toes to keep the standards high.
As mentioned, it makes the securing of the client recommendation even more important, and from that point we can also raise the importance of being able to make the most income from the advice provided. There are significant differences in terms of commission terms available within the equity release/later life market – another sign of maturity?
All payment terms are not equal and having a scattergun approach to where you place business could (when added up) cost you a significant amount of income. That’s why choosing the right club/distributor is so important – might it be more beneficial to put all your business with a proposition like the Air Mortgage Club where you have better commission terms plus you earn more, the more cases you put through.
Having worked so hard to secure the client’s business, why wouldn’t you want to earn the most amount possible from it? That makes perfect (and common) sense, but if you’re using multiple clubs then you’re unlikely to be doing this.
Just as the client is much more likely to be shopping around/conducting their due diligence before they choose their adviser, make sure you’re doing the same with the clubs available to you. There is a world of difference between the propositions available and the income you can generate as a result of that choice.
Stuart Wilson is CEO at Air Group