I don’t think anyone was that surprised that the FCA has decided to go ahead with its plans to widen the scope for execution-only mortgage business. While it was put out for consultation as part of a wider remit, the tone always suggested that it would take a great deal to change the regulatory hive mind on this point.
At our recent annual conference, speakers, including AMI Chairman, Robert Sinclair, while recognising that technology has changed the industry and needs to be considered as an integral part of a modern mortgage market, raised the point of how execution-only cases were going to be assessed and the dangers of retrospective action being taken by consumers when the choice of product/lender is found not to be what they expected.
But whatever we might think collectively about this volte-face by the FCA after so long insisting that mortgages should in the main be adviser led, continued debate on the topic would seem to be a waste of time now that the decision has been made.
Our view is a simple one. The number of customers who need advice is not going to dwindle overnight. There is no reason why the regulator might not reverse its decision if resulting evidence highlights the misgivings already aired.
Advice, particularly on the question of protection, is where we feel our members, along with the rest of the adviser community can make a difference. Figures suggest that as low as 6 out of 100 people enquiring about insuring themselves against death and disability on price comparison websites will go on to take out a policy compared to over 30% of customers who speak to an adviser, a very significant difference. With the regulator expressing its desire to see customers improve their financial outcomes, we are in a great place to continue demonstrating that advisers are best placed to ensure that customers can appreciate the advantages of financial planning which deliver solutions that are compatible with customers’ budgets.
As a dedicated mortgage and protection network, HLP believes that while the performance of advisers in the provision of protection far outstrips voluntary take-up via comparison websites, 3 out of 10 mortgages being fully insured is still too low. We are making 2020 the year in which we, as a network, give protection advice the priority and support it deserves, not only for new mortgage transactions but also for remortgages when reviews are due.
There is an old adage that might not be politically correct today but is still relevant – Protection needs to be sold, it is rarely bought. Modern sensibilities might not approve of the word ‘selling’ but by presenting the case for protection clearly and logically, not only will we increase the uptick in protection cases completed, but we will demonstrate conclusively why one to one advice is so effective.