First published by Mortgage Solutions
In a pandemic, with the vast majority of lenders’ employees working from home and with the need to reconfigure the operational structure of many businesses in order to continue lending, it was never likely that service levels were going to be consistently excellent across the sector.
For what it’s worth, my opinion is that the vast majority of lenders have done the best they could in the circumstances, however that’s not to say there isn’t clearly room for improvement from some, and perhaps greater collaboration across the industry to work out what went right, what went wrong, and where improvements can (and should) be made.
The recent announcement by IMLA that it is going to survey lenders to ‘identify the challenges they face which impact service levels’ is therefore to be welcomed, and the fact the results will be shared with advisers, AMI, and the like, should hopefully get us towards a greater visibility of the stress points, why they happen, and what can be done to resolve them.
That said, my immediate reaction in reviewing lender service levels is to ask where this can be of benefit for advisers, and from our perspective there appears to be a couple of areas.
Firstly, it’s obviously at the front end in terms of providing advisers with live insight about lender service levels in order to weigh up the approach that should be taken, the recommendation that will eventually be made, and the rationale.
We notice that Mortgage Brain now offers advisers a ‘lender service report’ which sets out to provide a greater level of service-related information. Clearly, from an adviser point-of-view, that information should cover how long it is likely to take lenders to respond, to deal with queries, issue DIPs and offers, as a minimum.
However – and a note of warning here – that information is coming direct from lenders, it may not be standardised right across the sector, and it might not be simple for advisers to make a like-for-like comparison. Plus, of course, ‘current service timings’ issued by lenders – given their broad brush averaging – may not be what is actually experienced by the adviser.
But, such service-based evidence for advisers is also a big step forward, especially given the regulator’s significant focus on price and what it wants to see from advisers who have not recommended the cheapest product to their clients.
In recent FCA missives, the adviser community has been taken to task for not purely leading on price, and instead for taking into account lender service standards which – quite correctly – could mean the difference between the client getting the mortgage (or in the timescale) they need or not.
One of the questions we have asked ourselves is whether there is enough tracking around the service levels of lenders in order to support an adviser recommendation where service overrides price for example. Up until now, the answer to that might well be no.
With these moves by IMLA/AMI and indeed Mortgage Brain, I am hoping the industry can begin to provide far greater evidence, and comfort, to advisers who may have their work questioned in the future. It will be informative to point to a moment in time and be able to prove that Lender X’s service standards were simply not good enough to make a recommendation of their product viable, regardless of whether it was the cheapest or otherwise the most appropriate.
This might be more imperative, for example, in a sector such as new-build where there is a far greater pressure to get the finance in order, and to exchange and complete within a much shorter timescale. Advisers may well be able to use this supplemented information to prove that any delays emanate from the lender side, not theirs.
Overall, this service performance/level data is very useful indeed for advisers, but it needs to be accurate, credible and dynamic in order to help paint the picture of why product choices have been made. Otherwise, there may be a tendency from some to continue calling the profession out for the right decisions, simply because they were not the cheapest on offer, which is not necessarily the right consumer outcome.
Rob Clifford is Chief Executive of Stonebridge