Clearly, one of the major regulatory concerns at present is the somewhat uneasy ‘coalition’ that exists between advice-led business and execution-only. At a time when the need for advice seems to be greater than ever, many in the industry are concerned that the focus is being shifted to providing an environment where execution-only can thrive, some would say, at the cost of advice.
Whether the regulator is truly immersing itself into creating a more benign environment for execution-only is up for debate, but one thing we can’t deny is that the intermediary share of the mortgage market is at record levels.
75% of all mortgages are now sold through advisers, and even if borrowers are being tempted to go execution-only, there is still a strong opportunity to present the value of advice, the protections it affords, and the reasons why opting out of advice is not a good idea.
That responsibility does lie with the entire industry and if we can get our marketing messages right, then I have no doubts that the demand for advice is only going to go in one direction. After all, can we think of a time when the complexity of borrower circumstances allied with the complexity of product choice have ever been so great?
Add in the fact that many borrowers – whether existing or would-be – actually want to deal with a professional adviser and be confident in the product choice they are making, and you might see why many firms are preparing for significant growth in activity. The big question of course is how you get ready for this and what you need to have in place, particularly from a human resources point of view, to be successful at meeting the needs of growing numbers of customers.
One of the major concerns I hear raised by advisory firm owners is just how they are going to meet this growing demand for advice, be that right across the board in terms of product sectors or indeed in specific, often more niche areas, like later life or specialist lending, for example.
While we are an industry which appears to be much more attractive to, for example, a younger generation of potential advisers, it’s not as easy as recruiting a steady stream of applicants straight out of university and expecting them to hit the ground running. For a start, the qualification, training and CPD requirements within mortgage advice are quite stringent and will require dedication and aptitude on the part of the employee, and a significant amount of support on the part of the employer.
It’s also not as easy as tempting in already-qualified, experienced advisers who can bring their own client base with them and fit in seamlessly. We’re all aware of how entrepreneurial our sector is and many advisers, who begin being employed, quickly want to move to a self-employed status and/or on to setting up their own advisory practice. In a very true sense, we’re actually lucky that this opportunity exists and we, as a network, certainly aim to help those who want to pursue their own business.
Perhaps though the answer for existing firms lies in a number of other different options and we certainly support our AR firms in growing their adviser footprint. For example, a number of firms offer their administration staff a pathway through to becoming an adviser if they wish to do this. Having been immersed in a business for some time, there is often no better candidate than those who already have a relationship with clients, who understand how the business processes and systems operate, and understand the requirements of being a successful adviser.
Then, there are those firms who are increasingly using apprenticeships to bring in new advisory staff and to provide them with a full training programme over a period of typically 12-18 months. Of course, their ability to advise will be predicated on how they work through their qualifications but having individuals who can marry up their studies with on-the-job experience, is often a very sound way of getting the staff you need, without some of the baggage that more experienced advisers might have picked up from various other employers.
Of course, as mentioned, bringing any new adviser in – or training individuals up to that status – is going to require a level of investment and resource on the part of the firm. However, biting that particular bullet can stand the firm in very good stead in order to allow it to develop existing and new business leads, and perhaps to offer more specialist advice services, especially if the individual concerned shows an interest or aptitude for these growing sectors.
We all want to see advisory firms growing their existing staff base and ensuring they have the quality staff needed to meet the demand of the general public when it comes to mortgage advice. There is clearly an opportunity here and, whatever the plans for your own advisory future, make sure you talk to networks like Stonebridge to see how we can help ensure you have all the human resources you need to move to the next level.
Lesley Sharkey is business development director at Stonebridge Group