Face-to-face beats the web, say brokers

RBS research suggests that most intermediaries do not see the internet posing a threat to their businesses over the next five years.

In a poll taken at the most recent RBS Intermediary Roadshow held in Manchester last week, 15% of brokers thought that there was no threat at all because people prefer to arrange their mortgages face-to-face.

60% said that they felt that despite the increased competition coming from online sources, there will still be room for mortgage advisers. Only 6% felt the internet was going to be a big threat to their businesses. Around 1 in 5 (18%) said that they would embrace the web and ensure that their online presence takes advantage of the benefits the internet offers.

Chris Pearson, drector of Intermediary Mortgages, Royal Bank of Scotland commented: “It’s good to see that mortgage intermediaries remain confident that their specific offer of expert face-to-face mortgage advice will still appeal to consumers. The internet will undoubtedly play a significant role in the way people research mortgages but with it being such a fast-moving and sometimes complex marketplace, sound advice is something people should heed.

“Having said that, our research does indicate that many advisers have recognised that having a visible and informative online presence can have a really positive effect in their bid to attract new clients. Investment in search engine optimisation, online directories and web content can make a real difference to intermediary firms’ digital profiles.”

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Equity release redemption penalties worry Hodge

Hodge Equity Release has warned of the threat redemption penalties could have upon the equity release industry if intermediaries don’t consider them in their advice to clients.

Jon King, managing director of Hodge Equity Release, said: “The growth seen in SHIP members’ business between Q1 and Q2 2008 is encouraging and highlights the unfaltering popularity of drawdown products and the domination of the intermediary channel for distribution. However, to ensure this momentum continues, we are concerned that advice surrounding these plans needs to adapt.

“Traditional mortgage advice has centred on affordability, plus the method and timing of repayment. Equity release, on the other hand, requires advisers to help clients minimise the eventual repayment and thus future review meetings should inevitably review the option of remortgaging. With this in mind, redemption penalties therefore form a vital element of the advice process.

“The importance of flexibility for equity release planning does not stop at considerations for drawdown products. As a provider that has been in the market since the mid 1960s, Hodge has gained significant experience that clients also want flexibility to move their plan if circumstances change; including any movement in future interest rates. In order to achieve this, advisers must be in a position to make clients aware of all penalties that could affect their decision.”