Mutuals have a long history of maintaining a strong presence in the local community and this is something which we will always strive to uphold when and where we can, both in the good times and the bad. From an intermediary mortgage market perspective, whilst our presence and quality of service need to be as evident, we are reliant on an extensive distribution network to present these solutions to a much wider audience. A network which has been carefully assembled to control volumes, maintain service standards and be aligned with our lending strategy.
My point is that the quality of advice remains vital whether via branches across a range of financial products or through distribution partners as people of all ages are seeking to get a stronger grip of their financial situations. However, even though the value of this advice is so high and the need so great, all too many households continue to miss out.
This was evident in research from Scottish Widows which suggested that almost half of households (47%) have never accessed professional advice in their lifetime and two in five say they have minimal financial planning knowledge. Despite the financial challenges people are facing, 67% of survey respondents stated that nothing this year had prompted them to seek professional financial advice.
Now I’m not sure if this encompasses mortgage advice or not but this really does smack of opportunity for the intermediary marketplace. That’s not to say advisers have struggled for business in recent times, far from it. Activity levels in the purchase market remain healthy and the remortgage sector is particularly buoyant during a time of interest rate uncertainly and homeowners looking to fix their major outgoings for longer.
Specialist areas such as self-build are also attracting the attention of a growing number of borrowers. This trend is especially apparent thanks to the recent government push for self and custom build housing to play a larger role – as part of a wider package of measures – in securing greater diversity in the housing market, increasing overall supply and helping to deliver the homes people want.
This type of lending has historically been the domain of older, wealthier borrowers but shifting demographics and the rise in the profile of programmes such as Grand Designs, amongst others, are encouraging younger generations to embark on more ambitious property-related projects. And it’s the younger generation which we, as an industry, need to be targeting in helping improve this 47% statistic.
As an industry, we need to ensure that more households have access, confidence and trust in the professional financial advice process and a greater understanding of the benefits attached to receiving this advice both now and in the future. A factor which is evident in all our local communities, with lenders and intermediaries having a key role to play in helping to spread this important message.
Sue Pedley is business development manager at Hanley Economic Building Society