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Alan Lakey: The rise of the automatons

When asked why I’m always moaning or ranting about something my stock response is that I’m spoilt for choice because there is such a large menu to choose from.

This rejoinder is more factual than humorous and disguises one of the least considered ailments afflicting the industry and, to a lesser extent, the wider business world.

The disorder in question is the renunciation of common sense in favour of both process and automated response. Together with an reliance on tick-box mechanics rather than coherent thinking it provides for ludicrous outcomes.

This progressive condition has triggered relentless grumbling about the actions of over-zealous, regulatory functionaries and what seems to be their passion for inventing more ‘rules’ and further narrowing existing parameters.

Consider the substantial loss of time, as well as temper, when product providers interpret the Data Protection Act such that every 12 months they require fresh proof that the adviser acts for the client.

The DPA was never intended to be interpreted in this way so it may be that it is not the work of an over-zealous compliance cyborg but a considered commercial decision to appropriate advisers clients.

Consider also the nonsensical stance where a product provider initiates contact by telephoning an adviser and then has the temerity to demand identity confirmation for both the adviser and the client. What is achieved by this other than a fraying of nerve ends, a series of harsh adjectives and a loss of time and money by both parties?

The devastation that is the current mortgage market also utilises logic-defying processes. Abbey, which I have previously declaimed for attaining a BA (hons) in idiocy, has moved further down the road to madness by individually reassessing risk when an existing borrower approaches them for a new product. It revalues the property using the discredited desktop valuation tool and this can easily result in a shift from a 70 per cent product to a dearer 85 per cent version. Worse still, its insistence that interest-only borrowers pay a higher rate than their capital and repayment counterparts.

It seems that the Abbey considers such borrowers as higher risk. Of course, by increasing rates and the resulting mortgage payments this becomes a self-fulfilling prophecy whereby the borrowers have been turned into higher risk.

So, what do these time-consuming and life-sapping aspects have in common? They have all decided to operate within a process-driven environment rather than use the experience, knowledge and common sense of human beings. Computers are able to analyse data but they lack the ability to introduce common sense.

When one mortgage BDM telephones me she apologises for asking me who I am and what my FSA number is. She has been my BDM for four years yet she is not allowed to deviate from this ponderous route designed to safeguard client data.

How many advisers spend as much time on fruitless administration created by legions of grey-faced, rule-worshipping bods, as they do on the real meat of their work?

Alan Lakey is partner at Highclere Financial Services


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Spot on – I’m glad I’m not alone!

  2. This made me smile – the familiar small hassles I experience so often too!

    I’m especially wary when I receive a phone call from a provider and they want to do identity checks for me and the client first – in those situations should I not verify their identity first before giving out client sensitive information?

    Chicken and Egg.

  3. Well said Alan. We are all being inexorably pigeon holed in both business and society to the detriment of individuality.
    In times gone past if you had never been in debt, you were considered a good candidate for mortgage borrowing as monetary frugality was prized.

    Now if you do not have a credit record and never been in debt, the lenders consider you a high risk.

    At one time some sections of society used to indulge in mind altering drugs to change their perception of reality.

    Now the world and society has turned decidely weird, those same people now take Prozac to get them back to the real world.

  4. The Abbey’s treatment of existing customers/mortgage prisoners may set a dangerous precident notwithstanding the fact that it is probably a breach of the new MMR rules put in place last month which state that existing customers/mortgage prisoners must not be treated differently to any other borrower).

    I am aware of existing customers being effectively re-underwritten/credit scored on the anniversary of the fixed rate for example a 75% I/O borrower being offered the same rates (all of which are higher than SVR) as an 85% borrower on expiry of 2-3 fixed rates. In many cases an increase in monthly payments of £400-£600 pm and substantially higher than the equivalent new business rate.

    It is interesting to say the least that Abbey state clearly rates available to existing borrowers are based on LTV/risk profile and do not publish widely rates available to existing customers (unlike ALL their competitors who not only publish rates widely but do not discriminate between existing and new borrowers) stating that eligable rates are ‘client specific’

  5. Well said Alan. I receive calls from my bank and they ask me to go through id&v checks – they called me! Irritating and a waste of time.

    On the Abbey front, you are right – levels of idiocy beyond belief. My personal experience says it all. I had a mortgage with Abbey for 5 years on my home in London. I was moving to Kent to a property of the same value and I did not require any additional borrowing. I rang Abbey and was told that yes, my mortgage was portable but no, they wouldn’t port it. Reason? I couldn’t afford it, allegedly. “I am paying the mortgage now”, I said. “Yes, and that is all fine”, they said. We went round the circle a few times but in the end, Abbey said they were happy for me to pay the mortgage in London, but not in Kent. I went to a mortgage broker and took out a new mortgage. In a completely bizarre twist, the mortgage is with…. yes, you guessed it….Abbey.

  6. I'm all right jack 22nd November 2012 at 1:50 pm

    Fair comment it might be but what about looking at this from a different angle. For example, how would I feel if my bank-lender phoned to discuss personnal matters without checking my identity first and it turns they are actually taling to my next door neighbour? Keeping that in mind spending an extra minute answering their question is not such a big deal after all. The words get and life spring to mind… Before anyone asks I do not work for a bank!

  7. The Grey Defector 22nd November 2012 at 4:03 pm

    ‘Anonymous’ 1.50

    Perhaps you should work for a bank…maybe become a compliance officer. Better still, I understand that there are vacancies at E14 where the water is flowing over the yacht and the small brown rodents are running in all directions.

    Before you embark on a sturdy defence of the indefensible consider the sense of the situation where you (the adviser) telephones a company and goes through a tortuous identification process to be told that they cannot answer the questions so will phone back. Ten minutes later you are phoned back by the same person who repeats the whole thing by rote.

    Not using the brainbox is why the RDR is coming. Innit!

  8. you are going to have no panel left soon if you dont start thinking with your head.

    You rely on your panel – not the other way round. You give people bad press too often and they will stop doing business.

    Stop ranting and make your CIC website look like its from the 21st century and not 1980. Its horrific

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