David Geale, Director of Retail Banking at the FCA, reaffirmed the regulator’s commitment to helping people improve the energy efficiency of their homes through green finance. “We want to see ongoing innovation from lenders, with compelling incentives that will influence consumer decisions as they seek to improve the energy efficiency of their homes,” he said, adding that “with over nine million regulated mortgages in the UK, the sector can be hugely influential in helping borrowers reduce emissions.”
However, Geale also highlighted some of the potential risks lenders face in trying to boost their green credentials. “Lenders adopting a blinkered approach and targeting only the most efficient properties would have the unintended consequence of making it difficult, or very expensive, to secure a mortgage for properties with lower energy efficiency, even if those properties could be significantly upgraded,” he said.
But despite the challenges posed by green finance, Danny Belton, Head of Lender Relationships at Legal & General Mortgage Club, described it as “a great opportunity for mortgage brokers.”
What Consumer Duty means for mortgage advisers
“How well do you really know your customer? Can you identify their vulnerabilities today and can you identify potential vulnerabilities in the future?” This was the key question posed by Emma Howell, Business Development Manager at Worksmart, who warned against viewing Consumer Duty as simply “TCF on steroids”, as “it goes well beyond TCF in terms of understanding your customer.”
Nic Dent, Worksmart’s Head of Client Engagement, noted the importance of personal competence, upskilling and continued CPD as a key to successful implementation. “Success of Consumer Duty – and success of your organisation – rests on your skill and capability. If you do things in a good way, you’ll be compliant by virtue of managing things effectively,” he said.
He also pointed to the importance of technology in meeting the demands of Consumer Duty. “The regtech industry has exploded in the last few years,” he said. “Chances are, its more efficient and beneficial for you to leverage technology.”
The importance of later-life finance
Nick Birdseye, Strategic Partner Development Director at Legal & General, looked at how the priorities of older people are changing and, as such, so is the retirement finance landscape. He highlighted how improvements in healthcare meant people were living longer and many retirees had different expectations and life goals. These expectations, he noted, may require a different approach to asset management, which is why “later life lending should be part of your business plan, whether you’re a mortgage adviser or an IFA.”
He also pointed out that record-high house prices today mean that people are getting on the housing ladder later and many will ultimately become later life borrowers in the future. “We’re going to have more and more people entering the over-55 borrowing community and we need to engage with this market, to understand the lending and advising opportunities within it,” he said.
Protection and vulnerable customers
“The cost-of-living crisis means we’re really seeing the number of vulnerable clients growing,” said Jonathan Barrett, CEO and co-founder of Comentis, discussing the importance of insurance and income protection. He advised mortgage advisers to develop “a consistent process” in identifying clients who might need additional support, urging them to “be comfortable in asking potentially difficult questions about clients’ circumstances.”
“It’s important that you start to prepare some pathways of interventions and support mechanisms,” continued Barrett. “You don’t need to fundamentally change your advising process, a lot of this is small tweaks and changes. There are lots of things you can put in place to support clients, which means they get a better experience, and it makes sure you are meeting the vulnerability requirements in terms of delivering better outcomes.”
Will the Mortgage Conference return in 2024?
“At the Mortgage Conference our main aim was to educate and inform – helping delegates and their businesses get ready for 2023 and face the challenges it may bring with confidence,” said John Somerville, Head of Financial Services at LIBF and host of the Mortgage Conference.
“We invited the best from the industry, and they came. Our speakers and panellists gave an expert view of the mortgage, protection and equity release markets, and the information that was shared reflected the key issues of Consumer Duty, vulnerability, and green mortgages. There was a focus on building successful businesses for the future. This ultimately ensures we raise the standards of customer outcomes throughout the industry.”
Somerville added that “we’ve had a fantastic response to the conference and we aim to be back again in 2024. We can’t wait to see everyone again.”
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