Now that the General Election and the Euros are over, and while we await the start of the Olympics, perhaps our minds can turn to all things adviser-related, and certainly how we move the sector and our firms forward.
Especially with the first anniversary of Consumer Duty coming at the end of July – we underestimate its overwhelming influence and the positives it can provide at our peril.
Consumer Duty is undoubtedly reshaping the landscape for mortgage advisers in the UK, presenting unique challenges and opportunities. This regulatory shift is compelling advisers to adopt a more holistic approach to client service.
Historically, we might all have chosen to overlook certain financial products and services, but under Consumer Duty, we must all broaden our scope. This comprehensive approach not only aligns with regulatory expectations but also enhances the value proposition for advisers.
The fundamental part of the Consumer Duty is of course that advisers are often the primary financial contact for many clients. This pivotal role extends beyond securing a mortgage, encompassing areas such as wills, estate planning, life cover, pension provision, investment advice, and more if we want it.
While advisers may not directly handle all these aspects, possessing a broad financial knowledge to guide clients towards appropriate solutions is now absolutely essential.
Unlike many networks that outsource these services, we are offering a range of in-house access to a wide array of financial products, ensuring advisers maintain their client relationships and provide comprehensive service.
The interpretation of Consumer Duty by various authorised businesses and networks has, in our view, varied significantly. This disparity has resulted in some advisers struggling to adapt to the new requirements.
For instance, compliance issues have arisen from seemingly minor oversights, such as not addressing life cover or failing to document advice properly.
As a network we have aimed to simplify this transition by offering integrated solutions. Our in-house capabilities cover a wide range of financial needs, reducing the burden on advisers and ensuring compliance.
One of the primary benefits of our approach is the potential for advisers to generate additional income. By offering a full suite of financial services, advisers can meet their clients’ diverse needs while enhancing their earning potential. However, this expanded role does of course require a shift in mindset. Advisers must recognise the importance of comprehensive client service and adapt to the new expectations. This adjustment can be challenging, but will be absolutely crucial for long-term success and compliance.
As mentioned, the current regulatory environment has highlighted the importance of thorough documentation and holistic advice. Recent complaints and legal cases have underscored the need for mortgage advisers to cover all financial bases, even those beyond their traditional remit.For example, issues related to life cover or stamp duty have demonstrated that advisers must provide comprehensive advice and document their guidance meticulously.
For smaller DA firms and one-man bands, joining a network like ours could be particularly beneficial. These firms often struggle with a growing compliance responsibility and may lack the resources to offer a full suite of financial services.
By joining, they gain access to in-house capabilities and can ensure their businesses are compliant and valuable.
Another significant advantage of joining a network like JLM is the opportunity for advisers to monetise their business at the end of their careers.
Building more business
For too long, too many mortgage advisers have viewed their businesses as purely transactional, with limited long-term value generated as a result.
However, by integrating additional financial services, advisers can create a more robust and valuable business model. We have recently focused on providing a clear pathway for advisers to sell their client books, ensuring they continue to earn from their existing clients even after retirement.
This approach mirrors successful models in other sectors, offering advisers a tangible and valuable retirement plan.
Moreover, the network supports the development of advisers by providing in-house training and resources.
We have expanded our team to include specialists in various financial areas, from wills and estate planning to life cover and investment advice. This growth ensures our advisers have access to the expertise they need to provide comprehensive services to their clients – all in-house.
In addition to individual benefits, an integrated model as outlined above promotes better client outcomes.
Advisers can offer a seamless service across various financial needs, ensuring clients receive comprehensive and coordinated advice. This approach not only enhances client satisfaction but also builds long-term client relationships, increasing the overall value of the adviser’s business.
Consumer Duty represents a significant shift in the mortgage advisory sector, but it also offers substantial opportunities.
By embracing a holistic approach and leveraging the resources of a network like ours, advisers can enhance their service offerings, increase their earning potential, and securing their financial future.
Rory Joseph and Sebastian Murphy are group directors at JLM Mortgage Services
