As we look forward to what the year has to offer, one prediction which is a pretty well nailed on certainty is that the scale of product transfers will continue to grow. Nearly 18,500 pounds for pound remortgages were completed in November last year according to UK Finance, and the ease with which product transfers can be completed will encourage greater numbers of mortgage holders to stay with their existing providers irrespective of the fact that with a little advice customers could save money.
We only have to look at the costs involved in moving home or moving mortgage to see why the product transfer’s popularity is growing.
However, because of the transactional nature of a product transfer, there is a hidden danger that the very simplicity of the decision leaves little or no time to ensure that a customer’s protection needs are reviewed at the same time. At a time when advisers’ value is at risk because of the danger that some customers see little value in the product transfer process, it is important that firms are able to offer a full advice service, which should include a full review of a customer’s needs.
The regulator has made it clear that a full insurance discussion should never be optional for a customer entering or re-visiting the mortgage process, however product transfers because of their very nature, are more likely to result in fewer of those protection discussions taking place.
Let’s face it, we all know how many new “never happen to us” homeowners decide to defer any commitment to protection in the face of the impending payment burden of their mortgage. It is easy for advisers not to press customers and certainly, with something as easy to arrange such as a product transfer, it can be even easier to ignore
However, advisers need to bear in mind the commitment they make to their customers when handing over the IDD. While providing advice on the most appropriate product transfer candidates is the most pressing task, there is a risk that the process becomes merely transactional and does nothing to reinforce and foster the relationship between both parties.
It is easy to diarise a follow up to discuss protection, it is clear from everything we hear in the market and from a wider range of industry stats that there are still too few mortgages being protected to ensure that a majority of homebuyers and remortgagers are adequately covered or have confirmed they have chosen not to act.
At HLPartnership, a key focus for the Network in 2020 is to put protection firmly at the heart of every adviser/consumer conversation and as such, provide all of the tools which advisers need to engage customers. From regular workshops to the latest in CRM technology to keep customers under review, our aim is to reinforce the fact that advising and recommending protection is socially and morally the right thing wherever you are in the country.
