Complexity, simplicity and efficiency

How we communicate with clients has obviously evolved as have their needs and those of lenders. The demands on our business have also changed in terms of time, energy, resources, associated costs and the impact of technology. Additional product, policy and criteria complexities continue to affect our day to day lives and the emergence of the specialist lending market, alongside increased demand for such products types, means all intermediary firms have had to adapt and seek additional support along the way to keep up with ever-changing market conditions.

It’s inevitable that further challenges are around the corner in light of Covid-19 issues, the Brexit fallout and uncertain economic conditions. Factors which will again make intermediaries firms reassess how they operate.

With this in mind, it was interesting to see a survey from Virgin Money highlight that over three quarters (77%) of UK mortgage brokers expect their roles to change over the next 12 months. Of these, almost four fifths (79%) think it will become more demanding with customers needing guidance and some 77% believe it will become more complex with market and customer needs changing. Nearly all mortgage brokers surveyed (94%) said that the pandemic is having an impact on their business, with 54% saying that this impact is significant.

The main drivers were identified as increased unemployment as a result of Covid-19 (flagged by 80% as key), house price uncertainty (68%), but also improved first-time buyer incentive schemes (39%). A tenth (10%) predict a boost in demand as a result of falling interest rates and a further 10% identified a fall in demand from foreign buyers as a result of Brexit. Other drivers of change predicted included expected restrictions to lenders’ criteria and the end of the current stamp duty holiday.
More than half of those surveyed (51%) would like to see improvements to their experience when working with a lender in the form of removal of data entry duplication throughout the journey, as well as better options that allow them to manage their clients existing mortgages (56%). A similar proportion would like to see product improvements from lenders such as bespoke underwriting options (63%) and more innovative products (52%).

There is nothing particularly surprising here but when reading between the lines three key words spring out – complexity, simplicity and efficiency. On the surface, the two latter components may appear somewhat at odds with the former. However, they encompass the difference that the successful integration of technology can make when it comes to streamlining front and back-end processes for advisers, specialist distributors, service providers and lenders.

Additional market complexity means that the value of the advice process is rising at a rate only rivalled by bitcoin (at the time of writing at least). Establishing key relationships and tapping into the right support network will also prove vital in establishing clear lines of opportunity in 2021 and help overcome any expected or unexpected bumps that will inevitably lie in the road.

Looking forward it’s certainly not all doom and gloom, but intermediary firms have to remain adaptable and ensure they can successfully diversify into the types of areas which will benefit their business over the short, medium and longer-term while ensuring that their client’s needs are being met.