Category: Business Quality

Protection update: Is your client covered for mental health?

National Account Manager for Protection Craig Bryce looks at the latest news regarding mental health and highlights how you can help your clients stay protected against one of the most common workplace absences in the UK.

Critical Illness Cover and Life Insurance are vital to ensure your client and their family are covered against worst-case scenarios. But what about the most common situations that clients can find themselves in?

This is where income protection comes in. It normally pays up to 60% of their income and protects against long term absence. It serves as daily peace of mind should they need time off work, your client won’t have the added stress of worrying about covering the bills.

How common is absence for mental health?

According to ECIS data, absences for mental health are as common as absences for colds and bugs. This makes mental health now one of the top three reasons for employee absence, with musculoskeletal conditions and general sickness.

The problem doesn’t look like it’s going away anytime soon either, with a recent NHS report showing that nearly a third of ‘fit for work’ notes issued by GPs are for psychiatric problems. This has now made it the most common reason for ‘fit for work’ notes to be issued, ahead of musculoskeletal diseases.

How can your client cover themselves?

Fortunately, most income protection providers pay out for absence for mental health, which unless they have budget income protection, will pay out for every occasion they are absent from work after the deferred period has elapsed.

It is also important to ensure that should your client be absent from work for mental health problems, they don’t have the added stress and anxiety of not working and not being paid. This can exacerbate the problem itself and extend their absence from work.

What if they already have cover?

A good protection menu plan that covers all the scenarios that might make your client vulnerable to financial shocks is always recommended. After all, serious illness and injury are all too common reasons to be absent long term from work, which will not be covered by Life and Critical Illness cover.

Right now, absences from work for mental health are becoming more long term, with one in five psychiatric ‘fit for work’ notes issued for periods of over 12 weeks. This means that the employer being able to cover your client during the period of absence becomes less likely, which makes income protection even more important.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.

Looking ahead to 2018 – Are you ready to help your clients?

Product Development Manager Nathan Reilly highlights some of the big opportunities for advisers to help clients in 2018

2017 was a big year for several sectors in the mortgage industry, with plenty for advisers to keep on top of. This has made helping advisers prepare for opportunities and adapt to change an even bigger focus for our network and club this year.

To help advisers stay ahead of the game once again, I have highlighted some of the top opportunities there will be to support clients in 2018!

The cessation boom

Current data predicts that £220bn worth of mortgage product cessations are due in 2018. This is a massive opportunity to help clients ensure they are on the most suitable product for them, especially if that means they can save money on their monthly mortgage repayments.

Some lenders are increasing the number of remortgage and product transfer products they offer. Data shows that remortgaging was responsible for 37% of valuations in August 2017, which is its highest share of the market in a decade. Early signs suggest remortgaging will have another big part to play in 2018.

Base Rate rises possible

Whether or not the Bank of England increases the base rate from its historic low on Thursday 2nd November, there has been definite movement from the Monetary Policy Committee towards an increase.

Even a small upward movement could create a substantial change in consumer behaviour. Moving from just talk of a rise to the increase itself will mean people may start looking more closely at those stress margins they were tested against. Advisers will be invaluable once again, as this may also trigger a new wave of remortgage opportunities.

Changes to HMO

A recent survey found that more than 85% of all landlords were unfamiliar with upcoming changes regarding Houses of Multiple Occupation. From April 2018, landlord clients may have to carry out expensive restructuring work on properties or risk being fined.

The new laws will impose tougher minimum standards on room sizes, waste disposal and storage facilities. After the changes, some landlords may even be left with rooms they are no longer able to rent out to tenants.

GDPR comes into effect

The General Data Protection Regulation, otherwise known as GDPR, will replace the existing Data Protection Act. This will become part of UK law from 25 May 2018 and apply to any organisation that handles any individual’s personal data. The new rules are designed to give more people control over how their data is stored and for how long.

Help for mortgage prisoners

The FCA has been calling for lenders to do more to help mortgage prisoners. These are borrowers that have found themselves trapped on a lender’s SVR, unable to remortgage due to complicated borrowing scenarios.

Experts are concerned at the growing number of mortgage prisoners in the market, who often as a result of changing circumstances no longer meet new affordability and stress testing rules. Fortunately, we have grown the number of specialist lenders on panel to bring advisers more options to help those with borrowing needs that require a specialist touch.

Second phase in BTL tax relief

After being introduced in April, the changes in tax relief that landlords can claim on their mortgage repayments for second homes will reach its second phase in April 2018. The level of income tax relief landlords can claim will be restricted to the basic rate by 2020. This will affect those that let residential properties as an individual, or in a partnership or trust.

All residential landlords with finance costs will be affected, but only some will pay more tax. Landlords that won’t be affected include UK resident companies, non-UK resident companies and any landlord of Furnished Holiday Lettings. It is of course important to ensure that clients are getting the required tax advice from an expert when considering the financial effects of any tax changes.

Advances in technology

It is hard to get away from changes in technology, and this is as much the case in the mortgage sector. Robo-advice is still being looked at as a possible way of streamlining the mortgage process for consumers. Freeing up time to spend with clients can only be a good thing, and far from replacing the adviser, changes in technology could simply mean more clients will be supported even more efficiently.

A certain portion of those needing to borrow money for a home will of course be looked after more quickly through automation. But human advice is still highly valued in a sector that contains numerous borrowing scenarios, which often need looking at in more detail than simply a series of questions.

Other things to keep an eye on

EPC changes – Energy Performance Certificates (EPCs) are used as a measure of the energy efficiency of a property. Although first introduced for those buying and selling homes, they are now prevalent in the rental market as well. From April 2018, landlords will need to reach a minimum EPC level before renting their property to new tenants.

Aging population – As people live and say healthier for longer, it becomes more common to borrow into later life. Lenders are adjusting their criteria all the time to suit the changing needs of older borrowers. This includes higher age limits and a raft of more suitable options to suit their needs, such as interest-only and specialist products.

Open Banking – The CMA (Competition and Markets Authority) retail banking market investigation found that larger banks did not have to compete for market space when compared with their smaller and newer counterparts. This has resulted in consumers paying more and not benefiting from new services. The CMA is therefore implementing one of their reforms called ‘Open Banking’, a transparency initiative that the FCA finalised requirements for in September.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.

The Business Assurance Team’s top 5 tips to improve case quality

Business Assurance is a vital part of your business and improving case quality can be very beneficial. Business Assurance Supervisor at Mortgage Intelligence, Sam Clowsey, has started off 2019 by sharing his top five tips to improve your case quality.

1. Note down anything useful

Make notes on anything that is considered pertinent to the case. Commenting on criteria or customer circumstance is particularly useful to an assessor.

2. Ensure everything is up to date

Where there has been a delay in submission, request up to date bank statements and payslips.

3. Inspect bank statements

Inspect bank statements to identify additional current accounts and financial commitments. All active credit must be recorded in the fact find or commented on if recently cleared.

4. Explain why your recommendation is suitable

Ensure the justification in the Reason Why Letter clearly explains why a recommendation is suitable to a customer’s requirements. High level or generic explanations are not considered appropriate.

5. Check the documents

Check documents to ensure that they have been copied in full. New copies will be required where parts of passports or payslips are ‘cut off’. Bank statements should be consecutive and where applicable, both sides of the document must be scanned.

To become a member of our award-winning network or club contact us today on 0345 130 7446.

Wrapping up another fantastic year of support for appointed representatives

Head of Sales and Marketing Sharon Mawby rounds up another fantastic year of award-winning support and services for appointed representatives

What a year 2017 was! We have made plenty of great changes and expanded our services across all our departments. We have put a big focus on making things simple and useful, and adviser satisfaction and success has been our reward. We listen to the feedback of appointed representatives and respond to their needs, which means we always deliver the most useful and relevant services.

So what have we been doing for appointed representatives in 2017?

The Sales Team

The phones on the desk are always ringing with advisers looking for guidance and time-saving support. The Broker Support Team keep up to date on criteria, to help answer complicated questions regarding industry changes.

With many big industry moves and lenders added to panel in 2017, our experts on the desk have been receiving lender training all year round, and sit with lender representatives to work through criteria and USPs.

The Protection Helpdesk has been a big part of the protection success for advisers in 2017. Many appointed representatives find the time-saving initiatives provided by the desk simply invaluable. They call the underwriters to find the most accurate indication of terms, to save appointed representatives crucial time to spend with their clients.

Relationship Development Consultant Nicole Smith has been on hand to work with appointed representatives on building business and dealing with issues. Nicole troubleshoots problems, points advisers towards suitable services and supports recruitment and business development.

The Marketing Team

We launched a new suite of promotional materials at the start of 2017, and so many appointed representatives have embraced the new range. We have worked on bringing modern and relevant marketing options to advisers, such as posters and sales aids to use with clients. It’s so satisfying to see our new designs used everywhere from office windows to social media pages.

Plenty of appointed representatives have also been taking advantage of the fantastic free client newsletter service, which sends out three relevant stories directly to clients once a month. This now goes out to over 20,000 clients and appointed representatives often receive leads as a result.

Our free adviser magazine Insight has also been developed in 2017, to bring even more stories, interviews and adviser tips. After listening to appointed representative feedback, we also now offer the magazine as a digital download.

Commissions Team

The Commissions Team have been developing automation and processes to help deliver faster payments, whilst maintaining the highest level of accuracy. We know how important cash flow is for appointed representatives, and our express payment service is an essential part of that. We therefore ensure the entire team is well trained in processing all the different types of payments.

Working closely with the IT Team, the Commissions Team have transformed the way that statements are processed, to ensure an even more water-tight system. The Commissions Team never stop looking for innovative ways to ensure appointed representatives get their fees quickly, without deviating from our very high service standards.

Product Development Team

One of the busiest departments in 2017, the Product Development Team have been adding even more lenders and providers to panel. This includes mainstream and specialist lenders, to give appointed representatives plenty of options with which to help clients. The team has also developed a number of exclusives designed for the needs of appointed representatives and their clients.

With so many new additions to panel and industry changes, we knew how important this year’s events were going to be. That’s why the team have delivered plenty of webinars and workshops, as well as a brand new Specialist Lending Event, to ensure engaging and insightful support for appointed representatives.

After listening to appointed representative feedback and analysing the market, the protection panel proposition has also been refreshed. This includes the development and expansion of two new panels, and the implementation of protection portal software SolutionBuilder.

The IT Team

Working behind the scenes to bring the best technological solutions to appointed representatives, the IT Team have been developing several in-house systems and integrated a range of new software. The Team also work to help appointed representatives in their day to day business, by developing the adviser website Broker Zone, helping it run smoothly and work for appointed representatives at all times.

SolutionBuilder has also been developed to support client protection conversations. This new addition means that appointed representatives now have the ability to research, quote and compare protection needs. This has now been integrated with our point of sale system, and supports single and multi-benefited products.

The Business Assurance Team and Authorisations

The Business Assurance Team have continued to focus on case quality in 2017, by educating appointed representatives on systems and processes. Many appointed representatives were invited in to visit the office in 2017 and spend time with the team, to give them the opportunity to see a case being assessed from our perspective.

To continue to support case quality in 2017, the Business Assurance Team have launched a useful catalogue of videos, which show appointed representatives exactly what a case checker reviews on each section of an assessment.

The Business Assurance Team and Managers have been working closely to ensure a consistent message is delivered to appointed representatives. The Business Assurance Team are there to both protect and support advisers, and the team regularly consult with advisers on presenting cases and documentation requirements.

Authorisations has been moved back in-house, allowing more control on timescales and developing relationships with new appointed representatives coming on board. This has enabled them to work on the smooth transition from application to authorised adviser, and be the first port of call for appointed representatives when they join the Network.

The Compliance Team

The Compliance Team have been providing more than just telephone-based support for appointed representatives. They also write policies, processes and create material to promote positive consumer outcomes to further protect appointed representatives. The team also produce and control risk logs, implement FCA rule changes and deal with consumer complaints.

The team’s regular bulletins are a really important way to get messages through to advisers, as well as the Compliance Resources page on Broker Zone, which is always being updated to support appointed representatives on a daily basis. With many industry changes and new rules in 2017, the team have ensured they are getting the messages out to appointed representatives and keeping them updated.

Join our award-winning Mortgage Network as an appointed representative, or become a member of our Mortgage Club, to start benefiting from our fantastic range of comprehensive services and support. Call the Broker Support Team on 0845 130 7446 (opt 1) to find out more.

Why is the right culture important?

Even though the General Election took place over a month ago, many people are still talking about how it was such compulsive viewing, with many staying up until the early hours awaiting the result.

The fascination was watching all of the opinion polls and predictions fall by the wayside as the losing political parties accepted their fate graciously. How did these parties get their strategy so wrong, why did it not deliver the clear objective to win the election with an outright majority?

Commentators gasped as the charts changed to a sea of blue and the Labour party were in shock as they saw virtually all their Scottish seats lost to the Scottish National Party in one night. Surely if the Labour party had been close to their customers and understood what they needed to do to get their vote they would have changed their tactics to secure those votes.

What was their strategy and did they have the right culture within the party to question the tactics to deliver that strategy? How would it achieve the end goal?

If people are afraid to speak their mind and go with the majority to keep the peace that is a culture that doesn’t work in either politics or business. If the public didn’t see Ed Miliband as a strong credible leader, why did the Labour party not see that either? If they were in touch with their customers surely someone would have stumbled across it.

It is the same in business – we set a goal, we put together a strategy to achieve it and then look at the tactics required to deliver that strategy. As always it is the team that you build around you that adds the magic required, they need to feel valued and listened to, their views are important to ensure you get the tactics right.

Once the team understands what is required of them and why their role is so important to deliver the overall strategy you have a good chance of achieving your goal. Setting the right culture is in my view essential, and putting the customer at the heart of the business is a culture that works well and leads to success. We have seen what happens when you don’t!

Mortgage Intelligence Industry Insight: I’m Not a Robot

At Mortgage Intelligence, we invest in the right people and the right technology for both appointed representatives and directly authorised advisers. Sally Laker highlights the importance of maintaining a balance between embracing new technologies and continuing to support a people-based industry.

I recently changed my TV package online as the lure of the next two series of Homeland got the better of me.

The change was the usual story really – my password didn’t match, my e-mail address didn’t match and so I decided it would be easier to pick up the phone and speak to someone about changing the package. And, it was. It made me think about our industry and the need to deal with people face-to-face and over the telephone. The people factor builds trust and relationships as well as providing a valuable service.

The other essential tool is good technology. To provide a valuable record of the advice given to the customer and all the associated documents loaded onto the system. A good Point of Sale (POS) system is so important but like everything it is only ‘good’ if it is kept up to date.

We recently updated our version of the Key POS system to change the way in which we record data and use it. Even though the system is an up to date system, it was a substantial piece of work bringing in contract developers to deliver the changes we required. There are numerous stages, including the specification, which takes time and requires experienced people who understand the system to map out what is required. This then needs to be formatted – a different skill required, so that the specification can be interpreted into ‘developer speak’ to enable the work to commence.

Frequently, there are choices and processes that need guidance all the way through and it is important to consider the impact of any slight change, or you could be back to square one. Once the work is ready, testing begins. You need people who understand the system and will test it and try to break it. Flaws get picked up and then fixes and changes need to be done. That goes back and forth for some time until the upgraded system is ready to be released achieving the desired result. The cycle needs to continue and we regularly look at what the next enhancements will be.

The recent changes we have released were significant and we now have an enhanced system that incorporates the dynamics of today’s regulatory world.

After going through this process, it becomes less onerous as knowledge of the system improves. It was still a challenge, expensive and time consuming but we allocated a six-month timeline which was a tight timescale to keep the focus on the job and complete it.

We have always promised to invest in technology that provides a system that is up to date with mortgage and insurance industry needs and we will continue to do so. We do know that both appointed representatives and directly authorised advisers are not robots and that’s important to us, because although this is a people-based mortgage and insurance industry, we need to be backed up by good technology and not replaced by it.

If you are interested in switching over to join our award-winning Mortgage Network as an appointed representative, or becoming a member of our Mortgage Club, contact our Broker Support Team on 0845 130 7446 opt 1.

Mortgage Intelligence Compliance Update: Stranger Danger

Stephen Adams highlights the risks unregulated introducers pose for appointed representatives and directly authorised firms

A large proportion of fraudulent activity stems from business that was originated via unregulated introducers. This is not to say that everybody looking to introduce mortgage business to your firm is a fraudster. However, it is clearly the case that close attention should be paid by all appointed representative and directly authorised firms to individuals approaching them to introduce business.

At present there are a number of ex-advisers who have either been terminated by the FCA or removed from lender panels but still want to make money in the mortgage market. They are regularly approaching unsuspecting advisers and seeking to exploit any weaknesses in their due diligence checks. To protect your business you need to be sure that the individuals that you deal with are genuine, honest and ultimately do not put your career at risk.

If after completing your checks you are happy to proceed with an introducer agreement then it is strongly recommended that the relationship is put on a professional footing. A simple agreement, signed by both parties, to outline your relative responsibilities and limitations is a good way of setting up the business relationship. Any agreement you make should set out the terms of the arrangement, such as what product types will be referred, how the client is informed that an introduction has been made, how information is passed to you, how the agreed remuneration will work and how the agreement can be terminated. If the introducer is not keen to have an agreement of this type in place then you should certainly ask yourself why this would be.

By carrying out robust checks as part of your standard procedures for taking on introducers we believe that you will reduce the chances of dealing with fraudulent clients. Of course you could undertake all of the above and still be targeted by an individual who wants to commit fraud. Be sure to adopt a common sense check when dealing with introducers and customers. If you don’t feel comfortable with what you are being told then ask more questions, if you are still not comfortable after this then do not proceed. It just isn’t worth the risk to your business.

If you would like to join our award-winning Mortgage Network as an appointed representative or become a member of our Mortgage Club, contact our Broker Support Team on 0845 130 7446 opt 1.

Is it time for a review of the metrics surrounding arrears?

What I love about this industry is the constant changes and challenges we face, often we look back and find our businesses are stronger as a result.

Take the quality metric for example, lenders decide that they were no longer talking about sales volumes but had a whole new agenda about quality. Huge metrics were drawn up for networks with various combinations with which our appointed representative firms would be measured. Some were so complicated it was difficult to interpret them.

Over time they were tweaked and more information was shared with the networks, as a level of trust was built up for the first time with lenders and their fraud and risk departments.

As a result we all know and understand so much more. We are able to recognise information that needs to be challenged from day one. Many cases that may have potentially been a fraud case don’t get through the door and once you know what to look for, it is so much easier to protect your business and deal with the right clients.

However, one of those metrics has always puzzled me – how can networks and brokers improve on the number of cases that go into arrears?

Divorce, death, illness, redundancy and financial hard times are all reasons for falling behind with payments but they are not events that the broker can predict when arranging a mortgage. It is, however, a relevant discussion to have with the customer and therefore providing protection for them plays an important part in the advice process.

However, it may be time for the lender to accept that if they are unable to give the broker any information on cases that are in arrears, including client name, brokers can do no more to cover this aspect.

The lender holds the data and the lender makes the ultimate decision to lend. They currently have little interest as to whether there is a policy in place to protect the client’s income which could prevent arrears in some cases. Maybe it is time for lenders to not only review the metrics but look at addressing the issue of protecting for the future when arrears may not be as low as they are now.

Mortgage Intelligence Update: Helping to make income protection more affordable for clients

National Protection Sales Manager Bernie Buron explores several ways advisers can help make Income Protection more affordable for clients

Affordability is still one of the biggest consumer objections when talking about any kind of protection, but income protection in particular is such an underused yet common sense approach to covering finances, that breaking down the affordability barrier is especially helpful for clients.

Helping clients visualise the situation they would be in were they to lose their income is such a useful way to break down opposition to affordability when taking out income protection. Comparing the swift and stress-free claims process with the laboured and unreliable state benefits system can also highlight why income protection is such a good idea. But even when your client has recognised the benefits and the risk a lack of protection can bring, affordability can still remain an obstacle.

So in your client conversation, how can you help your clients work within their budget so that they don’t leave themselves open and vulnerable to worst case scenarios?

Deferred periods can be extended to help with affordability

Extending the deferred period on a policy will normally reduce the premiums, as it reduces the risk of pay-out for the provider. Of course as an adviser your priority is to protect your client as far as possible, which means recommending cover that starts from the moment they are no longer fully covered by their employer. But if affordability is still an issue, extending the deferred period so that your client is at least in some way covered is an option, as long as it is recorded in your client conversations and on your Reason Why Letter.

Budget income protection is a possible option

Clients should always consider longer term income protection first, as this provides the most cover. But there may be circumstances where affordability has become enough of an issue for budget income protection to become an option. This option may also better suit those on zero-hour contracts and agency workers, as their employer most likely has no legal obligation to cover their income if your client was unable to work. Most providers will limit the pay-out time to 24 months.

Menu plans can help tailor protection to your client’s budget

Menu plans are available with most of the big providers and can be a really useful and convenient way to arrange all your client’s protection to suit their circumstances and their budget. Not only do they allow you to mix and match products and tailor protection to your client, but when it comes to claiming, having all their products with one provider can deliver that added peace of mind and convenience at a difficult time. Menu plans can also help advisers discuss options and maximise cover within the ascertained budget. If affordability is still an issue, you can record this and then discuss scaling back some of the benefits, whilst still maintaining the core cover products.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.

Mortgage Intelligence Update: Are you giving your client every remortgage opportunity?

Stephanie Charman talks remortgages: a sector that has seen a recent surge in interest from consumers because of fixed-rate lender competition and an even lower Bank of England base rate

There is no doubt that “remortgage” is currently the word on advisers’ lips. Some are even seeing remortgages now making up nearly half of their total business. After recent CACI data also surprised many by revealing that the UK mortgage market is expected to see over £14bn worth of maturities in September 2016, the time for many of your clients to remortgage could be now.

Regular contact

Staying in regular contact with your clients is key to creating opportunities for them to save money through a remortgage. Reviewing products with your client when their mortgage is due to come to cessation, is also essential in maintaining business levels and ensuring that you are always in mind when it comes to your client and their finances.

Timing is key, and many advisers are finding that simply reminding clients that they are there to help them make the right decision is a winning strategy. Keeping an eye out for their lifestyle events can ensure you offer a review of their finances at the right time for them and you.

Rate changes

A rise in the Bank of England base interest rate (BBR), something not yet seen in years, would normally be the trigger for a remortgage rush, as borrowers grab a fixed rate before SVRs climb. Instead, it has conversely been the drop in BBR which has triggered a surge in remortgage opportunities, as lenders renew competition and offer even lower rates on fixed rate deals.

Switching to a new deal might not just save your client money, but also give them the opportunity to fix their interest rate to a low figure for the next several years. As a network, we saw a big increase in remortgage business compared with last year, which shows that advisers are already making the most of the opportunity to help their client move to a better deal.

Avoiding SVR

Standard Variable Rates, or “follow-on rates” as they are sometimes known, are currently sitting at somewhere between 3 and 7 per cent. Although these are still historically low, not all lenders have passed on the Bank of England base rate cut, so for some borrowers the margin between SVR and base rate has effectively increased. Meanwhile fixed rates continue to drop, which makes this an opportune time to remortgage for many clients to possibly secure a better deal and long term peace of mind.

Network and lender support

Many lenders have also improved their systems, underwriter access and general application process to make it as efficient as possible. They recognise that with advisers so busy at the moment, saving time wherever possible is paramount to ensuring brokers and their clients are able to make the most of the remortgage opportunities available.

Barclays amongst other lenders is making the most of the recent CACI data, offering an SVR comparison tool, to provide you with a complete overview of current SVRs that some of your clients may be paying.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.