Robert Sinclair, CEO of the Association of Mortgage Intermediaries (AMI), has said that mortgage advisers and intermediaries still occupy the strongest possible position in the marketplace but there will be major regulatory and competitive challenges ahead.
Speaking at yesterday’s FSE Cardiff at the SSE Swalec Stadium at Sofia Gardens in the Welsh Capital, Sinclair outlined a dominant position for advisers. “When it comes to mortgages, banks are still not good at what they do, when they try to do it themselves,” he said.
“Lenders can’t do any more [business] beyond what they’re currently able to do. It was said that ‘MMR was a gift for advisers’ but MMR is not a gift; advisers benefit because they are the flexible resource who are able to take on the extra work and service more customers at any time.”
Sinclair said that the UK’s impending exit from the EU may benefit advisers in terms of the documentation they have to provide to clients. “The ESIS [European Standardised Information Sheet] is awful – it’s not a good document and we may well be able to get rid of it in the future, but not just yet,” he said. “The same goes for the new rules that were introduced in the Mortgage Credit Directive for foreign currency mortgages.”
He did however highlight a number of issues which could potentially cause problems for the advisory sector over the coming months and years.
“The number of housing transactions is certainly not where it needs to be,” he said. “There have been a declining number of properties on estate agents’ books for some time. Some London agents have less than five properties on their books. I put this down to what I call the ‘Rightmove effect’ where previously people would walk down their high street and register with say five agents, and one of them would get that person to put their home on the market. Now these people don’t put their home up for sale until they see a house they want to buy on Rightmove, view it and put in an offer.”
Sinclair also pointed out that the FCA would begin a mortgage market study in 2017 which would be likely to implement further changes in 2018. This study would focus considerably on competition within the mortgage market. He also dismissed the potential threat of ‘robo advice’. He said: “I don’t think robo advice will come. Advisers give consumers comfort that they are doing the right thing – consumers want to see the whites of an adviser’s eyes.”
