Adviser or salesperson? The debate rages on...




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In releasing his controversial comments about the quality of current mortgage brokers, and “lack of talent”, Mr George Dodds of Homebank Financial Services has certainly stirred up a debate.

Having read his story, and had the privilege of reading brokers' responses, there are many valid points to his argument.   Basically, his story was aimed at saying that brokers have lost sight of “the full sell”, meaning they have been led – due to the good times of mortgage client abundance – to just selling, and scoring as many hits on selling a mortgage, but not really looking after the clients' overall needs, and advising on those needs.   This has resulted in Mr Dodds struggling to find “good salesmen”, and he is now considering taking on the cost of training newcomers to the profession, so he can be responsible for their training and can ensure they get taught the right attitude, how to sell, and how to fully cover the clients' protection needs.   There's nothing wrong with that, apart from the glaring use of the word SALESMEN, they are, or will become advisers, that's my only gripe with his intentions, perhaps we mean the same thing but choose different words...   When I think of salesmen, estate agents spring to mind, or car salesmen, a totally different world to giving financial advice such as on mortgages, because advising on finance to purchase or refinance property and land requires an in-depth knowledge, not only of residential mortgages, but on BTL options, bridging finance, development finance, commercial finance etc...   Mr Dodds gets it wrong when he calls it “mortgage broking” an easy option for the cowboys. Yes, he's right that there are still too many wide boys (and girls) out there, but mortgage broking is more complex and requires more product knowledge and hands on experience than advising on pensions and investments. I know as I'm qualified to do both.   Philip Curnow replied to Mr Dodds and wrote: “Ideally, we should get back to a system where salespeople were called salespeople and there was no confusion. An adviser, however, was supposed to advise the client first and foremost and, if appropriate, then provide the client to the best solution to their problem.”  I agree Philip. Another respondent was Peter Taylor, MD of Taylor Hartley Partnership in Tyne & Wear, Peter has some very strong views and comes out very much on the side of Mr Dodds. His opening paragraph went as follows: "Unfortunately, Mr Dodds is absolutely correct. Mortgage brokers generally evolve from those who couldn’t be bothered to retain Competent Adviser Status and viewed the mortgage market as easy money rather than a ‘door opener’ to a long lasting adviser relationship. "How many mortgage brokers actually covered the client needs for both life cover and critical illness and then extended this to ensuring sufficient life cover to replace income to provide for surviving dependents? How many advised PHI to replace income, recommended arranging a will and the benefits of a full financial review?” He went on to say: “In reply to Mr Havanand, this is not selling; it is highlighting and satisfying needs or at least making the client aware of their shortcomings. Furthermore, without our rigorous file checks and ban on sub-prime mortgage cases each and everyone would have been prepared to ‘create applications’ that’s why we got rid. Remember Mr Haanand, mortgage brokers were responsible for making applications add up and you know it!” As I was reading Peter's comments an email pinged through, it was from my compliance department, they'd just sent me two exams to complete, with a deadline of October 4th. This came a week after a full annual compliance review, so mortgage brokers do have to be competent, just as IFAs do. There's no way out. Also Peter, I hope that when you are writing to your clients, you take more care in how to spell their name, in 3 attempts you've spelled mine 3 different ways. But once again, like Mr Dodds, and all of us, you do make valid points and we should all strive to get better standards across the business.  

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