How do we get more brokers to ‘do’ secured loans? Well, the answer is – you don’t or at least you don’t if you try and hit them over the head and insist that they take up secured loans.
One of the main issues that has stood in the way of greater take up in the intermediary community is the way in which has been marketed in some quarters. Post MCD, the regulator’s call that clients be made aware of secured loans, is not the same as insisting that brokers must use secured loans.
Unfortunately, that was the message that many brokers took from the publicity generated by certain stakeholders in the market. Thankfully, advisers, particularly those who have lived through the myriad economic and regulatory changes over the past few years were never likely to be swayed by that kind of rabble rousing. Even the promise of ‘cheaper’ fee structures failed to overcome the inbuilt scepticism.
The truth is that brokers don’t want to be ‘told’ that they must use secured loans just because the regulator says that clients must be aware of secured loans. The endorsement from the FCA was never meant to be a green flag to thrust secured loans down the throats of the intermediary community as if remortgaging had had its day. Indeed, the figures up to a year after MCD, showed how underwhelming that kind of message had been.
At Fluent, we always believed that education was the key to unlocking the potential for secured loans. If advisers began to see where second charge loans could be used and were the appropriate choice, there was a better than even chance that business would flow as a result. For us, that has definitely been the case.
There remains much to be done in terms of education and challenging outdated preconceptions about the sector. But, please let’s have no more talk that advisers must recommend secured loans. If we do our job properly and demonstrate where they fit, the overwhelming evidence is that good advisers are taking the message on board and new business has followed and will continue to grow.
Jeff Davidson is head of intermediaries at Fluent for Advisers