Customer choice has narrowed – the FCA could help fix this

02 Nov 2015

Last month what has become known as ‘the toughest job interview on television’, The Apprentice, began. For starters, I can’t honestly think of another job interview on television so it was always bound to win that accolade, which leaves me wondering what sort of competition we will witness. I’m suspecting that, much like previous years, there will be an assortment of competent people thrown together with what might politely be described as ‘wannabes’. It’s relatively entertaining and no doubt will include its fair share of good ideas thrown together with some of the most idiotic nonsense you could ever wish to see on the TV.

This type of competition appears to be a long way from the competition we all come up against in business. Our everyday working life may not be as ‘dog eat dog’ or acutely personal as that shown on The Apprentice, but there is certainly a lot to consider, a lot to overcome, and (quite frankly) a lot to worry about.

Of course competition is a fact of life and, let’s be fair, without it we would be unlikely to strive and push for greater excellence or to improve our service and product offering. Given that we are already players within the marketplace, we may well feel that it is an open road to travel in order to be active in our sector, however, this might not be the case for all. Indeed, if we think about our own business journeys to the point where we sit today, how many times did the obstacles appear insurmountable or incredibly challenging. Perhaps too much so?

Breaking down barriers

That will certainly be one of the views the Financial Conduct Authority (FCA) might wish to consider when it opens its study into mortgage market competition, and whether it is a ‘closed shop’ or ‘overly hard’ to move into this space. Certainly, for every sub-sector of the market that appears to be resplendent with lender and product choice, there will be others where the options are few and far between. Why should that be? What barriers have been raised which make this the apparent status quo?

From the perspective of a mortgage adviser,  I would be surprised not to hear any number of experiences, especially since the Mortgage Market Review has meant clients simply do not have anywhere near the choice they once had. We’re not talking about markets such as heavy sub-prime either, which have all but disappeared in the post-credit crunch fall-out, but areas which should ordinarily offer significant product choice – interest-only, lending into retirement, mortgages for the self-employed and contractors – but do not seem to do so.

A market ‘fit for purpose’

What are the reasons for this? Is market regulation, albeit needed, having an overtly detrimental effect on the ability of existing lenders to compete in these spaces? Are new offerings – banks, challengers, specialists – having to jump through too many hoops in order to bring a proposition to market? Do we simply not have the accessible funding necessary in order to develop these proposition ideas further? And when they do get to market, is there no other option but to go to the limited, specialist, higher margin product areas, as opposed to attempt a more mass-market appeal?

This review will certainly have to be wide-ranging in its brief and its deed. Especially if we are to develop a mortgage market which is not just fit for purpose now but offers choice and opportunity much further down the line. Increased competition is certainly key in that respect, and while we have seen this improve in certain parts of the market over the last 12 months, the regulator may need to play its part in helping develop a far more accessible marketplace across the board in the months and years to come.

Bob Hunt

Blog Archive

Opinion: The mortgage revolution is unfolding 
10 Dec 2018

Brokers’ fortitude will see them through this ‘depressing and dispiriting’ situation 
10 Dec 2018

Paradigm CEO Hunt invests in mortgage switching platform Dashly 
19 Nov 2018

We should be confident despite the uncertainties 
14 Nov 2018

FCA should leave mortgage market alone until Brexit uncertainty lifts 
09 Nov 2018

Not following EU rules could benefit the market 
16 Oct 2018

Long-term fixes fail to catch on 
01 Oct 2018

Mortgage market must ensure it deals in Project Clarity 
21 Sep 2018

Advisers can help landlords get their skates on for HMO changes 
11 Sep 2018

A deeper look at the state of the UK lending market 
17 Aug 2018

Understanding product transfers 
30 Jul 2018

‘Go compare’ is not so ‘simples’ 
26 Jul 2018

It’s worth looking into later life lending 
05 Jun 2018

SVRs are a cash cow for many mortgage lenders 
04 Jun 2018

Leaving a network should be more straightforward 
08 May 2018

Not all later life customers are in the same boat 
03 May 2018

Advisers must beware leasehold ‘minefield’ 
16 Apr 2018

It’s just not cricket 
12 Apr 2018

Proc fee timescales are way off 
29 Mar 2018

Broker-lender relations have undergone a fundamental shift 
28 Mar 2018

Opening at weekends shouldn’t be a priority 
13 Mar 2018

Take control to signpost clients in your direction 
22 Feb 2018

Product transfer: ‘Lenders might view greater adviser involvement as a problem’ 
12 Feb 2018

Buy-to-let advice is needed more than ever 
08 Feb 2018

Open Banking is a revolution without the fanfare 
16 Jan 2018

Land Registry needs to engage with brokers over Instant Mortgage 
08 Jan 2018

Simply focusing on age will not fix borrowing into retirement 
22 Dec 2015

Reduce the regulatory burden for firms by reallocating money from FCA fines 
03 Nov 2015

Customer choice has narrowed – the FCA could help fix this 
02 Nov 2015

The regulator’s differing interpretations of rules 
21 Oct 2015

Change is constant 
08 Oct 2015

Paradigm signs exclusive specialist lending deal with Brightstar 
06 Oct 2015

Landlords cash in on PRS 
22 Sep 2015

MCD – no grace but plenty of favours 
16 Sep 2015

Equity release success signals change in consumer perspective 
05 Aug 2015

Remortgagers play at ‘chicken or egg’ 
29 Jul 2015

BTL has closed the housing gap 
20 Jul 2015

Analysis: Writing a will can avoid a death blow 
15 Jul 2015

Industry deserves housing minister appointed to Cabinet 
22 Jun 2015

Waiving Stamp Duty won't encourage downsizing 
08 Jun 2015

Damned if they do, damned if they don’t 
01 Jun 2015

In the Spotlight with Bob Hunt 
26 May 2015

Election result provides stability 
20 May 2015

‘Grey borrower’ power is set to grow 
13 May 2015

Decisive election result could spur new build revolution 
27 Apr 2015

MMR 12 months on 
13 Apr 2015

Mind the protection gap 
09 Apr 2015

Analysis: Change status with the right support 
08 Apr 2015

Housing will be election battleground 
16 Mar 2015

Securing the specialist string to your bow 
04 Mar 2015

Interest rate direction is anyone’s guess 
04 Mar 2015

Regulatory B2L change is inevitable 
12 Feb 2015

Analysis: Do your homework with relationships 
04 Feb 2015

Lenders rising to the self-employed challenge 
04 Feb 2015

The sectors to watch in 2015 
06 Jan 2015

A helping hand 
05 Jan 2015

Can a landlord be truly ‘accidental’? 
17 Dec 2014

Coming in from the cold 
05 Dec 2014

Analysis: Why distribution demands inclusion 
12 Nov 2014

HSBC’s move signals cost of branch advice still rising 
20 Oct 2014

Analysis: Broker community boosted by HSBC 
15 Oct 2014

Just when I thought I was out 
08 Sep 2014

Analysis: Owning a home is not out of reach 
03 Sep 2014

Take level 4 advice exams before the FCA steps in 
02 Sep 2014

Analysis: Get set for more BoE intervention 
20 Aug 2014

Welcome to the Twilight Zone 
11 Aug 2014

Housing policy deserves seat at top table – Bob Hunt 
24 Jul 2014

MMR is enough to slow the bubble 
09 Jul 2014

Help to Buy remains in the spotlight 
08 Jul 2014

Mixed messages risk consumer confusion - Bob Hunt 
03 Jul 2014

It’s good to talk 
20 Jun 2014

H2B a rare housing policy success 
18 Jun 2014

Increasing mortgage volume will come through brokers - Bob Hunt 
27 May 2014

The better option to going direct 
14 May 2014

FCA concerned by packaging renaissance 
12 May 2014

Watch out for European regulation by year-end 
06 May 2014

Ask the Experts: Will MMR cause mass application declines? 
22 Apr 2014

Ask the Experts: Can a broker operate MMR-compliantly before 26 April? 
17 Apr 2014

Cross-sales not just for times of crisis 
16 Apr 2014

Brokers in the dock 
26 Mar 2014

Lenders in catch 22 situation over MMR - Bob Hunt 
25 Mar 2014

Paradigm launches protection arm 
21 Mar 2014

‘MMR Day’ may be a damp squib 
12 Mar 2014

Make sure your papers are in order 
12 Mar 2014

MMR lending slowdown could force protection bonanza 
18 Feb 2014

Countdown to MMR 
12 Feb 2014

A big year ahead for lenders 
04 Feb 2014

If the quality is same – why can’t AR & DA proc fees be equalised? 
30 Jan 2014

BoE is unlikely to be trigger-happy 
15 Jan 2014

We’re not in 2008 anymore 
09 Jan 2014

FCA cannot ignore views of smaller firms 
13 Dec 2013

The Prediction Game 
06 Dec 2013

Stay ahead of the regulator with CPD 
27 Nov 2013

Don’t let booming business hamper MMR preparation 
21 Nov 2013

Living up to expectations 
15 Nov 2013

MMR compliance underpins success 
30 Oct 2013

Advisers should step up to level 4 qualifications 
24 Oct 2013

Bank of England must follow words with actions 
02 Oct 2013

Lean times leave a leaner, keener core 
04 Sep 2013

If you don't ask lenders, you don't get 
22 Aug 2013

Steady as she goes is the right approach 
20 Aug 2013

Are we about to see a broker boom? 
16 Jul 2013

Now is not the time for procrastination 
10 Jul 2013

Improving standards is no grounds for complaint 
03 Jul 2013

Is product innovation being tied in knots? 
24 Jun 2013

We can’t rely on external stimulus 
06 Jun 2013

Put your services in the shop window 
06 Jun 2013

Mutual Magic 
30 May 2013

Does the FCA understand human frailty? 
07 May 2013

Has the mortgage market regained its mojo? 
17 Apr 2013

Help to Buy plus prudence equals prosperity 
05 Apr 2013

Will George Osborne be having a flutter ahead of the Budget? 
14 Mar 2013

Size matters on capital adequacy 
04 Mar 2013

Mortgage Indemnity Guarantees: helping first-time buyers fly 
19 Feb 2013

HS2? I’d rather see more houses built instead 
06 Feb 2013

95% LTV mortgages are not back... yet 
22 Jan 2013

Regulators have listened to feedback 
21 Jan 2013

The Great House Price Debate 
07 Jan 2013

Keeping your clients' wills up to date 
02 Jan 2013