The insurer’s quarterly adviser confidence index has revealed that confidence is down, sales are falling and remortgages have become the focus.
The mortgage division of L&G saw a 50 per cent drop in the number of advisers predicting better sales and protection sales are also expected to decline.
The index, of 258 advisers, is suggesting this ought to be the time where protection is paid more attention because of falling procuration fees, in an attempt to plug their income gap.
L&G director of housing Stephen Smith says: “What a difference three months makes during a credit crunch. Our last report showed optimism in terms of overall business prospects and protection sales. This report, however, shows a marked difference in sentiment, with a 50 per cent drop in advisers predicting better sales next month and far more saying that protection business will be flat or worse than the previous quarter. In actual fact, this is the ideal time for mortgage advisers to turn to protection to plug the income gap that they will be experiencing as a result of falling proc fee revenue.
“Remortgage business again seems to be taking centre stage as the proportion of house purchase mortgage business is set to be eroded. Any borrowers coming to the end of mortgage deals this year are going to need sound financial advice, so the intermediary channel has never been more important. Mortgage advisers have a far greater scope to source mortgages and exclusive products through mortgage networks than any borrower could ever hope to find on their own. Lenders that try and cut advisers out of the loop are treading a dangerous path.”