Working with intermediaries on behalf of the UK’s largest second charge distributor over the past seven years has given me a unique perspective on how far the sector has come in its development and the impact it is now having on brokers and their clients.
Here is an industry that has successfully adapted to the needs of the market it serves. Through its own internal changes, as well as through the challenges made by regulation, it is now a fully fledged member of the lending community. The evidence I have from meeting networks as well as individual ARs and DA brokers is that, while in some cases there had been a reluctance to engage with second charge in the past, those days are now behind us.
The conversations have moved on from trying to convince about the basic merits of second charge to ones where we are now talking to receptive brokers and networks, about where second charge products are most appropriate. Judgement is the key to deciding when to remortgage or use a second charge loan for capital raising and education about gauging those parameters is where we do so much work at the moment.
The shift in perception of the place of second charge loans in a broker’s deliberations has been marked and one of the areas we are working on at the moment is the issue of whether brokers want to give advice themselves or pass on a client to us as a specialist to provide the full advice package. We offer both routes.
What we have found is that many brokers, while now comfortable with second charge as a suitable option for their client, do not feel confident to give advice effectively. The evidence so far suggests that post MCD, many more brokers prefer to refer clients to specialists like us to provide a full advice service than just give them lending alternatives from which to make a recommendation.
It makes sense for brokers who have made the decision that a second charge option is the right one, to refer customers to Fluent for Advisers. They are safe in the knowledge that, apart from the whole of market service they will receive, Fluent will ensure that their customers are looked after right through the process, with the same care as if they were being dealt with by their broker.
As I speak to more heads of networks, it is clear that many more recognise the value of a service like ours, which ensures that ARs and DAs give the right advice to their customers when considering their capital raising requirements.
Fluent for Advisers will be exhibiting at the London Expos this autumn, so I hope to get the opportunity to talk to everyone with an interest in ensuring their clients have access to the widest range of potential routes to capital raising. See you there!
Jeff Davidson is head of intermediaries at Fluent for Advisers