Adapting is the antidote to current conditions
Friday 1st August 2008A regular sight in Oxford Street used to be an old man whose sole purpose in life seemed to be to walk up and down carrying a sandwich board on which the words ‘The End of the World is nigh’ were printed. I think there was also an exhortation to repent for past sins before the lights went out. To hear many people talking about the state of the loan and mortgage markets, is not dissimilar to the poor old man and his message of misery.
What intermediaries really want to hear is where the bright spots are, what the best strategy is to survive and whether anyone out there can offer more than doom and gloom in the form of some positive feedback on the future shape of the market.
The good news is that the secured loans market is going to survive. Not only that but after this period is over and lenders start to return, it will be a very profitable area for lenders, intermediaries and their clients. For lenders, it provides higher margins than on mortgages commensurate with the risk of taking a second charge. For clients, secured loans represent a truly simple means of raising funds quickly for any purpose, without the costs of valuations, legal and administrative fees associated with mortgages. With early redemption penalties down to one month in most cases, secured loans are a perfect solution for clients and a logical and compliant alternative to the cumbersome remortgage or further advance scenario.
In the meantime, intermediaries need to be alive to the growing need for less product based advice and more holistic and general solutions that address the requirements of a public searching for answers to real problems of debt that cannot be solved by another loan or mortgage. There is a great opportunity to look beyond finding a mortgage or loan and recognising that referring clients to specialist debt solutions companies who can help them with debt management plans or IVAs.
This is a good time to offer help and change the accent of the advice. When the market recovers and lenders return, there will be plenty of happy clients who will be more than willing to discuss their financial needs from intermediaries who have helped them during these challenging times. Now is the time to adapt!
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