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Keys to the door

At a time of intense competition in the mortgage market, most lenders know they must offer good products backed with genuinely good service if they are to survive. While headline rates win business, lenders realise it is service which builds and retains loyalty among financial advisers.

But getting the balance right is something many financial advisers say lenders need to work on. Many claim they are let down by lenders&#39 lack of service in giving feedback, processing paperwork and reducing delays.

Recent research by The Mortgage Business showed 35 per cent of brokers list failure to provide a swift service as their top grievance. All advisers know the annoyance and aggravation caused by chasing a headline mortgage rate only to find the lender is swamped with business and giving a minimal degree of service.

From bitter experience, advisers know it is their credibility that is damaged as much as the lender&#39s when a customer is let down.

With around 120 mortgage lenders in the UK, it is almost impossible for advisers to keep track of service standards from all the different lenders. Industry research is not much help either. The complexity of comparing service performance between lenders whose service levels can fluctuate is simply too difficult. So most advisers make up their own list of consistent and good service providers.

There are three key areas where good service is essential – administration, communication and underwriting. A common gripe from advisers is that lenders could work harder at developing a better way of tracking mortgage cases and keeping advisers informed of progress. Our recent research shows more than one in 10 brokers is annoyed by the failure of lenders to give regular updates and allow them direct contact to staff who know about their case.

For example, getting a quick decision in principle is no good if it then takes ages to get a mortgage confirmation.

The research also shows that, where possible, brokers like to have some degree of continuity with the person they speak to at the lender&#39s administration centre, especially if there are problems. Forward-looking lenders have developed small relationship teams to focus on this.

The Packaging Association chairman Ian Nelson says: “It has taken a while for lenders to understand exactly what it is that brokers want but the best are getting very good at providing dedicated teams of staff who you can contact at any time to talk about your case. It is all about providing experienced staff who can provide a consistent service.”

Effective administration depends equally on the quality and decision-making powers of the staff. Staff with a can-do attitude who are skilled at problem solving are a company&#39s greatest asset, especially when allied with the power to make decisions.

Information technology can also enhance service. Where systems are flexible and efficient, online management systems can be an enormously useful tool. They can provide instant information on the current status of the mortgage and avoid the frustrations of records being lost or not updated.

These systems can also be adapted to cope with changing customer requirements, as well as providing useful feedback on problem areas in the mortgage process.

But the benefits of good administration can be severely reduced by poor communications. From the moment an adviser lifts the phone, the quality of a lender&#39s communication skills is under the spotlight. This is not just about how quickly the phone is answered but how prompt the customer advisers are in responding to queries and whether they follow through by maintaining close contact with brokers during the processing of the mortgage.

Increasingly, brokers are demanding direct contact with the decision maker.

Underwriting is an area that is a minefield for many brokers and is responsible for dashing the hopes of advisers and clients alike. Research shows four out of five brokers believe that credit scoring is a poor way of underwriting mortgage business.

Lenders which are focused on service have become much better at stating clearly what their lending criteria involve. This transparency of approach can save a great deal of disappointment and, crucially, in urgent cases, precious time.

Nelson says: “It irritates me that some lenders are still so inflexible about the way they underwrite their business. Effective underwriting is about being able to take a commercial decision, not quoting everything by the book.”

None of these areas of service is any good without consistency and speed. Brokers can count the times that service has faltered because the lender has been inundated with cases or because a lender has changed ownership.

Consistency is an absolutely vital ingredient in the service mix. So is the ability to turn business round quickly and efficiently. There are few things more irritating than putting in call after call to a service centre that does not return your messages. It can be more than irritating if a broker loses business as a result.

Customers are demanding ever greater control over the goods and services they buy and this is filtering down to brokers, who are now expected to be much more informed about lenders&#39 decisions than at any time in the past.

For those that make the effort, the rewards of loyalty and repeat service speak for themselves.

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