Remote control

22 January 2009 0:00 am

The protection sector already enjoys a great deal of online business, with some IFAs advising on products remotely.

Progress from Royal Liver's entire proposition is online. IFA marketing manager Aidan Dewhurst says offering online advice could be the answer to some of the problems the mortgage industry faces.

He says: "Consumers have lost respect for the mortgage industry right now in the wake of all that has happened, so something has to be done to win people round. That can come with innovation. Innovation earns respect, it allows you to not just try and improve strategies but it helps you create whole new ones."

FTRC director Ian McKenna says there will be a big increase in online mortgage broking. He says: "The future of mortgage advice is substantially online. It is a part of the industry that could fit within technological limitations, even now. There is no reason why mortgages could not be advised on through mobile phones. Someone could see a property and then contact their adviser remotely there and then in front of the house, with a decision in principle over in minutes.

"The shape of mobile phones is changing, as is the shape of remuneration for mortgage advice. If revenue is smaller, you have to take people out of the equation as automation saves money, simply."

It is all very well if mortgage advice can be given remotely but is this what borrowers want?

Unleash Advice Partnership IFA Adrian Kidd says: "In my experience, around 40 per cent of clients are happy with online finances and the rest just do not take it up." Kidd spent time in Singapore during which he carried out broking business remotely and says his business levels were unaffected. He says: "With online broking, you can be quick and you can just cut to the chase with clients. If you position your online proposition from the outset, there is no reason it cannot work successfully.

"For simple stuff like mortgages, online works. There is less travel time for the broker and it removes a lot of time-wasting which costs money but for IFAs, the more complicated investment and pension advice still needs the client there. People want to see the whites of the adviser's eyes when they are making big life decisions."

The Mortgage Broker Limited has been broking remotely for five years, using a number of specialised websites and Google searches to attract clients.

Marketing director Terry Ruddy says: "The internet is now the standard for people who want to search for value products and with the internet you can understand what the consumer wants, what they are looking for and who is searching. We deal with a nationwide audience and we are in full control of our advertising. We can put our proposition out in front of everybody.

"With an online proposition, you can also aid the sales process. You can get in the right customers and you can educate them, answer their questions and build trust with the potential borrower. Then it is a lot more likely that they will stick with you and buy a mortgage."

Home of Choice chief executive Gerry O'Brien believes the future is online for mortgage brokers in a post-credit crunch world.

He says: "Lenders want online business and the regulator wants online business. If you can tell someone that you will send a soft copy, they are a lot happier because with paper business there is a higher degree of error."

O'Brien says his network has been entirely paper-free since 2005. "We can build scale online because for brokers, technology achieves volume," he says.

McKenna says the challenge now is for advisers who are not offering mortgages online to get their proposition in order before things pick up. He says: "The organisations who invest in the tools and the online practices now will be the ones who lead the way when the mortgage industry picks up.

"Advisers need to be shaping their business to fit the post-credit crunch world, especially for mortgage sales. The past role of the broker having power over the mortgage and how it is put together is over. The job of the adviser now is to match a borrower to a mortgage and that has to be done online."

Ruddy says: "Potentially, lenders could get to a point where they do not charge proc fees and mortgage brokers will have to be remunerated like IFAs. Brokers need to get their business in front of a national audience for as small a cost as possible. Investment returns, if done right, can be very high with the internet.

"Mortgages need to be delivered to the right person and those people need to be given exactly what they want. With the internet, that is a lot easier."

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