Brokers attending yesterday’s FSE Wales exhibition heard that the increased use of technology solutions, in particular greater engagement with Open Banking, should help end the “horrendous” paper trail that advisers still have to endure.
That was the view of Liz Syms of Connect for Intermediaries who was speaking as part of the residential mortgage panel at the event held at the Celtic Manor Resort, near Newport, South Wales.
The panel were asked about the introduction of Open Banking and how it might benefit mortgage advisers as take-up increases. Syms said: “I think we’d all agree that the paper trail advisers have to go through is pretty horrendous at the moment. Technology, and Open Banking in particular, reduces that paper trail and that can only be good for both advisers and clients.”
Paul Weatherhogg of Metro Bank suggested that while Open Banking had not yet changed the way advisers work yet, it would do in the future. “This will happen,” he said. “It is already in development in a fairly advanced stage and is moving along. There are of course a number of players in the market and we, as Metro Bank, need to decide which one we will use.”
Simon Read of Magellan Homeloans said that while Open Banking was “a panacea”, he felt the banks involved at the start of its introduction had been less than helpful in ensuring it was rolled out to the rest of the market. “The ‘Big Six’ have made this as difficult as possible to be put into the market and made it hard for all others to actually use it,” he said.
The panel also discussed the potential threats and opportunities for advisers throughout the rest of 2018. Syms highlighted the difficulty advisers now face in being a specialist in all markets: “Advisers should, in my view, really focus on a sector they really love. The market is very, very specialist now and long gone are the days when advisers could be good at absolutely everything. They need to be both adaptable and specialist. We carry out a lot of work in the buy-to-let market and this has presented both threats – in terms of the taxation changes – but also opportunities in that we’re working with more serious portfolio landlords. Some are moving 40-50 portfolio mortgage loans from their individual names into a limited company and that’s a lot of mortgages to advise on.”
Read highlighted the later life lending market as one which advisers would see considerable opportunities in. “Later life lending is a market that will explode in the next few years,” he said. “In the next few years I believe we’ll see convertible mortgages – moving from having a residential mortgage into drawdown. We’ll have a situation where your mortgage will become part of your tax planning.”
In terms of threats, Read suggested that an increase in the number of borrowers opting for five-year fixed rates “pushes income streams further out” and argued this change was “almost coming in under the radar”.
Craig Flinter of Atom Bank said that the market should be aware of what Brexit would mean, arguing it would take up a lot of time and resources of both the banks and the regulators, and would present a “considerable challenge over the next 18 months”.
Finally, Charlotte Grimshaw of Family Building Society, argued that lender’s business targets could not be achieved on price alone, and that advisers would see lenders having to “compete on service, because rates can’t go any lower”.