Short-term finance but long-term quality
Although we are talking about short-term finance, we cannot afford to do other than a first-class job in procuring the best deal in all cases
Living as we do in a regulated environment, the days of picking a lender based on familiarity rather than effectiveness in terms of the best deal for clients are long past. While there is nothing wrong with using lenders that perform well on the service front, there is a really big market out there.
So how do you make sure the deal you have put together is in the best interests of the client? We live in a world of ever more retrospective regulation, where the chances of having cases reviewed in the future to make sure the best decision was made are increasing. That may not be fair but it should send a warning that, although we are talking about short-term finance, it does not follow that we can afford to be doing other than a first-class job in procuring the best deal in all cases.
One of the major causes of the rise in bridging completion numbers is the involvement of packagers to help brokers source the best deals for clients. Why would you not want to make use of a facility that takes all the effort out of the process and provides you with the professional research you need to offer the best alternatives to your client?
In the past, bridging and technology have not exactly been the right partnership, and even now it is a work in progress. However, there are significant strides being made and not before time. So if the industry can offer anything ‘techie’ to help the adviser keep at least his £500 in Financial Ombudsman Service fees intact, we should take a look.
Newcomer Twenty7Tec, for example, is soon to launch its sourcing software that will give Trigold and Mortgage Brain some much-needed competition. This will also include bridging sourcing.
While sourcing will never take the place of the bridging knowledge retained by the human specialist, it will help make lenders more transparent with regard to fees and overall cost.
The big win for brokers, and especially networks, is that it will provide an effective immediate search tool and more confidence that the advice given is on the right terms for client, broker and lender.
The average broker may, at present, be reluctant to talk bridging to a client because it is still a less understood side of lending that is more risky and therefore more prone to complaint. By allowing the products to be sourced, I am sure brokers will start to feel more confident in the process of choice and ultimately the selling of the right product. Like any sourcing system, it should be seen as a helpmate, not a substitute for human experience, to determine what is best for the client, especially in the bridging world where there are many variables.
Over the past 12 months we have witnessed a surge in new entrants to the bridging and residential market. Seeing the likes of Fleet, Foundation Home Loans and, more recently, Axis Bank come into the buy-to-let space is great for bridging lenders, allowing an easier exit from a bridging loan. Typically, more bridging lenders joining the party should give bridging specialists a platform to generate better deals for brokers. But we need to ensure that new lenders in fact offer something new via product niches, better criteria or lower rates. Simply providing a copy of what is already out there is not going to make an impact.
The market is buoyant and advisers will be well served in making use of both the advances in technology and help from specialists to ensure that their deals are right for clients.