As we move to the point in the year where business written has more impact on the numbers for 2018, firms and brokers should be beginning their planning for a changing world. The government commitment to Brexit at any price, even a no deal exit, is now beginning to weigh down on consumer and business confidence. In our own sector all the messages coming from the PRA and FCA are that their job in increasing capital buffers is still in progress and that reducing risks and further protecting consumers has further to go, all meaning that doing business in the UK will be more difficult.
Interest rates rises and the stemming of cheap money from the central Bank are now key messages. The emphasis is now firmly placed with government to make the difference by providing a stimulus which will be more tightly focussed and have to come from a restricted tax take with budgets still being squeezed. It is against this background that consumer confidence is trending downwards with estate agents indicating lower instruction levels, retailers reporting lower trade and inward investment to the UK from abroad now virtually at a standstill.
Our politicians appear stuck in a rut that Europe needs an economic deal as much as we do and this could not be further from the truth. It is becoming clear that the conviction politicians in Brussels and London are holding control and any opportunity for economic consensus is a long way from the table. This will mean that regaining control of our laws and borders will come at a significant economic price. This is not to say that we need a change of direction, but need to steer a more informed course.
For mortgages, the purchase market is probably at a peak, as is buy-to-let. For those not in the growth market of equity release and later life lending, then the message for 2018 has to be product transfer and remortgage. 2018 will also see more lenders engaging using tech enabled processes with their borrowers. Also more brokers will bring more developed systems to market that will improve consumer engagement, increase productivity and leave their brokers with more time to concentrate on the advice element. Critical in all of this for the broker is two elements.
Firstly you must have a relationship with your customer. Regular contact, newsletters, information and updates since the last mortgage are essential. Contact to ensure you are front of mind will be the winners’ mantra. Use of social media as well as a website and email by knowing how your customer wants to be spoken to is key. The final part will be the sale of protection. The automated advice models will not do this and it is this that will set the traditional model apart. Well protected mortgages that are paid off on death, covered in the event of illness and properly insured means the lender will have a better experience.
Now is the time to start planning a better communications programme and setting out expectations on writing protection business. These are the aspects that will sustain businesses as we move through our exit from the Union and begin the automation of our industry.