The more things change, the more they stay the same. And although around the world and at home there are many issues that clearly should have greater priority than others, it shouldn’t stop us trying to fix or improve matters, certainly when you shine a light on the problems they cause.
Specific to the mortgage market, there are undoubtedly a number of adviser frustrations which appear to have been causes for concern since the year dot.
I read a recent article highlighting a number of current adviser ‘bugbears‘ and for some of these it felt like we have been talking about them for the best part of two decades, and unless we secure change, we‘re likely to be going over the same ground in 20 years‘ time.
Included are a number of process-driven obstacles in the way of advisers completing business effeciently, and in the article mentioned above, a number of advisers bemoan the use of free legals and the service levels of those conveyancing firms involved in them.
I can’t remember a time in the last decade, when free legals were not derided by the adviser community, and yet we have an industry which appears intent on still offering them, and still wondering why we come up against these problems.
On the surface, this might look like an issue for others, not least the lenders for offering free legals, the conveyancers themselves that appear ill-equipped to deal with the level of work, and of course the client because they are often unwittingly being taken down this route under the impression it will be smooth sailing.
However, one of the biggest reputational risks and costs I can see when using free legals is actually to the adviser, and I’ll explain why.
Over the last four/five months or so I’ve been involved in the housebuying process myself, remortgaging my current property and using the money released to purchase an investment one.
I used a trusted adviser and, given a combination of things – namely I was assured my case was pretty straightforward and I wasn’t necessarily in a rush – went with the recommendation to use the free legals on offer.
Needless to say, and I am not placing the blame at the door of my adviser, but this decision has haunted me until we finally exchanged on my purchase at the tail-end of March.
When we talk about issues in our market, we tend to forget these are all impacting on the consumer. I’ve been immersed in the mortgage market for a long time, and without that time served, knowledge and understanding, I think I would probably have given up the ghost with my transaction many times over. Such was the excruciating experience I had to go through.
The whole process with the free legal conveyancer, and indeed the lender, seemed designed to put the most serious stresses and strains on me, as the customer, and has no doubt been just as horrific for my adviser.
Mortgage offer sent to the wrong solicitor, no understanding that number of shares quoted on a certificate doesn’t equate to the value, no way of speaking to the conveyancer until you are seven days out from completion (and even then to be placed on hold for lenghty waits), constant requests for duplicate information, multiple requests to secure information from accountants/planning departments, zero priority contact processes even when within the seven-day completion period, multiple missed exchange dates, rate changes due to the delay, vendor almost pulling out a number of times fearful that I couldn’t complete the purchase. I could go on.
And that was just me. I know that my adviser had a worse experience, feeling so guilty about the shoddy processes that they went to the nth degree to try and fix the issue. From what I know, they themselves spent countless hours waiting on the phone (and I expect with other clients‘ priorities too) not wishing to let me down.
They now – get this – employ someone purely to wait on the line to the conveyancer or the lender, so their advisers don’t have to do this. How mad is that? And yet, free legals is still a thing – a very big thing – in our marketplace.
The cost to the adviser in using free legals is, in my opinion, huge. Not just in the resource they have to expend, but clearly in my case, the people they have to employ, the time spent working on a case, the risk they are taking on, the reputational damage they are likely to receive, and the future impact this will have in terms of referrals and introductions.
It all reflects back on the adviser. Lenders who offer free legals might argue that the type of experience I/my adviser went through is a small minority of cases. I’m going to respectfully disagree but even if it happens in 10%, the damage to the broker is going to be significant.
There has to be a better way – there is a better way. Lenders could stop offering free legals, start offering cashback, and encourage advisers and their consumers to seek legal representation which represents them not the lender, which ensures the conveyancer is actually paid what they should be paid, and which hopefully allows firms to resource effectively and work through the process with the best staff available.
I’m aware advisers are in a tricky position here but, even if it is just one out of 10 free legal cases which end up a nightmare, then that should be enough to wake up everyone, especially them, from the current situation which is undoubtedly unbearable for all.
Bob Hunt is chief executive of Paradigm Mortgage Services
