What’s the most important aspect of your business? Which area do you focus hardest on? I ask because I wonder if, sometimes, our market can lose its way a little and this may be one of those times.
Ever since MCD was implemented in March (pre-Brexit, pre-May, pre-Trump – can you remember those relatively sane times?!) there’s been plenty of talk in the second charge market of products and pricing. Indeed the fee debate is one that caught the attention of most commentators and still rumbles on (though I suspect the market will reach a natural resolution to this soon when things settle down). The focus has very much been on what customers are paying.
It’s been a tumultuous time and specialist master brokers / packagers have understandably tried their best to win custom and curry favour and pricing has been the main focus.
However, one area that doesn’t seem to be getting the attention it deserves – and certainly hasn’t been discussed as much as should be – is customer service.
The fact is, whether we’re talking about dealing direct with consumers or working with brokers, it doesn’t really matter how good our fees and products are if our service and communication lets us down. That goes for every company and includes all specialist sectors.
Just take a look at surveys in consumer magazines and newspapers on ‘the country’s worst companies’. The vast majority of the time it’s not the products or the prices that are complained about but rather the service received.
But what constitutes bad service in our industry? Well, thankfully brokers are a vocal bunch and when they don’t like something they’ll make it known. As specialist brokers we tend to deal with the complex and tricky cases so the chances of hitting a problem are higher and we all know the old adage “you are only as good as your last deal”
Maintaining high levels of service has to be at the forefront of our offering. If a broker is coming to a specialist he or she wants to speak to someone who understands the problem so having the right people available, great technology, regular unprompted communication and an attitude of always going the extra mile is what we should strive to deliver.
But no matter how good our people, products and systems are, our industry is not about easy wins. It’s about problem solving, tenacity and often taking on cases with a lower likelihood of success. So often in the specialist sector the conversation is often along the lines of “ We can place it if…..” which can result in a lot of back and forth effort between the specialist, the broker and the client. In these cases honesty and good communication are paramount – Specialist firms mustn’t let the broker think a case has a 95% chance of going ahead, when after moving heaven and earth to get further information; the chances were nearer 5%. But tackling seemingly “no hope” cases goes with the territory and that’s what really sets firms apart, irrespective of their fee structure.
MCD has resulted in slower decisions at the start of the process due to more rigorous affordability and sustainability checks on both first and second mortgages but the process thereafter has become smoother – especially on seconds. Some firms, perhaps in their haste to avoid delays or because of a lack of front line expertise, have fallen in to the trap of over reliance on computers and providing inaccurate quotes more often than not. It’s a great ploy to get the deal through the door but a real annoyance for brokers. Once brokers get past the indicative stage a quick yes or a quick no from a product expert is what they ideally want. And if it’s a yes this needs to be backed up with accurate and fully underwritten offers. Our job is to find solutions that computers can’t and to use our expertise and relationships to place cases which lenders would instinctively decline. I have always said to my team it is their job to know what each lender will accept better than the lenders staff know themselves.
The most common gripe from brokers relates to communication. Some want more, others want less but good communication throughout the process must rank up there with the attitude and expertise of staff. Behind the scenes there may be a massive amount of work going on: referrals, trying new lenders, more referrals at director level, new information to derail the case. However, the broker who introduced the case might not see this so we need to keep him or her informed.
Fair treatment of your clients by your specialist partner, good compliance procedures, research documents and routines to protect the client and introducing broker should be the norm. Ask yourself, if your client complained in two years time, have you been given the information to defend yourself or can your partner demonstrate a suitable product was sold and will they be willing and able to deal with a complaint at that time. If not where does that leave you? Industry insiders are already speculating which specialist second charge brokers are playing the short game and will not be around when there is a redress price to pay.
Much of what is on offer in the specialist lending sector will evolve therefore products, systems and expertise should improve as you would expect. Delivering great service is partly about processes but mainly about attitude so a change can be felt almost immediately. We exist to serve you and your clients. Good relationships, communication and doing the best we can every time are important and all lead to better outcomes. With all the talk of fees, systems and compliance let’s not lose sight of what really makes the difference. Great people delivering a stellar service and the right result for your clients.
2 out of 3 borrowers get a lower rate than our representative example of a regulated secured loan below:
Mortgages and Remortgages
£80,000 over 240 months at an APRC OF 4.3% and a discounted variable annual interest rate for two years of 2.12% at £408.99 per month followed by 36 payments of £475.59 and 180 payments of £509.44. The total charge for credit is £39,873 which includes a £995 broker / processing fee and £125 application fee. Total repayable £119,873.
Secured / Second Charge Loans
£63,000 over 228 months at an APRC OF 6.1% and an annual interest rate of 5.39% (Fixed for five years – variable thereafter) would be £463.09 per month, total charge for credit is £42,584.52 which includes a £2,690 broker / processing fee. Total repayable £105,584.52.
£4,000 over 36 months at an APR OF 49.9% (fixed) and an annual interest rate of 49.9% would be £216.21, total charge for credit is £3,783.56. Total repayable £7,783.56.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME
REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Written terms available on request. Loans are subject to affordability status and available to UK residents aged 18 or over. Promise Money is a trading style of Promise Solutions Ltd. Promise Solutions is a broker offering products which represent the whole of the specialist second mortgage market and is authorised and regulated by the Financial Conduct Authority – Number 681423.
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