Execution-only business is back, and it’s here to stay.

The FCA recently published its mortgage advice and selling standards policy statement, containing final rules and guidance on execution-only, with the changes now implemented and the balance of the mortgage market in flux.

This is not only a decision which will change the way borrowers take out a mortgage; it could also drastically and negatively alter the place of advisers in the mortgage process.

A new challenge from an old foe

Advice has always been, and should continue to be, an important step to securing a mortgage. For the majority of people, it’s the single biggest financial commitment they’ll ever make.

Execution-only removes the requirement for advice, and therefore for an adviser. There are no independent suitability checks, there’s no safety net, and there’s no level playing field – dual pricing means that execution-only platforms can promote particular products from particular lenders, with no one explaining the implications along the way.

Lenders are stepping in to fill the void, with their renewed push on product transfers turbocharged by the FCA’s new regulation. They also have no obligation to inform customers of cheaper products, even if these are the lender’s own deals.

The upshot of all this is that borrowers are being set up to fail.

Not only do lenders usually have unfettered access to these borrowers, but by and large they can also offer them a slick, efficient, and accessible user experience which makes remortgaging as simple as switching energy provider. At the moment, many intermediaries can’t do the same.

Fighting fire with fire

Here, we have the key – the way in which brokers can ensure they weather the execution-only storm and come out of the other side stronger, ahead of the competition, and ready for the future.

Providing borrowers with a top quality, digital user experience is vital for brokers who want to protect their business and their place in the market. The application process has to be slick and simple from end to end. But advisers shouldn’t go it alone – they should take advantage of platforms which do the hard work for them.

This starts with client relationships.

By the time borrowers get to the end of their current deal, sometimes after four and a half years if they’re on a five-year fix, it’s easy for advisers to remain out of sight and out of mind. When the time comes to refinance, and borrowers receive an email from their lender with a simple way to switch, many don’t hesitate.

Advisers therefore need to be proactive and make sure clients know they’re still there, ready and waiting to provide the expert advice that’s essential to getting the right mortgage deal. Doing everything yourself makes it ten times harder.

Advisers should use digital solutions to automatically get in touch with clients when the time is right, so they can focus on active cases. This can be done across multiple channels, from email to instant messenger – it’s important to interact with clients in whichever way suits them best. Advisers need a client management strategy which can help them retain as much business as possible throughout the remortgage cycle.

But, as we know, a chain is only as strong as its weakest link; in this case, a digital journey is only as smooth as its slowest part.

That’s why advisers need to ensure user experience is as seamless as possible at every point of the process, and that their workload is as streamlined as possible, so they have time to speak to clients rather than fill in forms.

Automated, digital fact finds are the first step. A client fills in their information, and it’s automatically populated throughout the adviser’s system and shared with lenders, saving hours of tedious re-keying for borrower and adviser alike.

Digital ID and income verification, which is as simple as taking a selfie or sharing bank details, means clients don’t have to dig out bank statements and send multiple copies all over the place.

When it comes to receiving a decision in principle, direct integrations and partnerships with lenders mean that applications can be submitted at the touch of a button, with almost immediate responses.

Adapt or fall behind

This is just a snapshot of what a seamless digital user experience should involve, but advisers need to know that it’s easily within their grasp.

Not only that, it’s essential that the intermediary market recognises the threat it faces and acts to protect its role in the mortgage process.

No borrower should be left to their own devices to make a financial commitment in the hundreds of thousands, but that’s what execution-only allows.

Digitising, and standing toe to toe with lenders on customer service, will not only protect those clients but will also set advisers up for success and enabling them to take advantage of the opportunities the market throws their way.

Conor Murphy, chief executive, Smartr365