Copy article

Broker feature for Mortgage Strategy mag

Journalist: Emma Simon, Mortgage Strategy

ended 21. February 2024

I'm writing an article on  broker education – and how broker needs up-to-date market knowledge and information, particularly when it comes to advising buy-to-let clients and property investors. 

To this end I'm looking for information and comments on the following points:
 

  1. What are the key market issues that brokers need to know about?  I'm assuming areas   like interest rates, inflation, tax changes, regulations, other macro-economic indicators etc. Are there other key issues - and which of these is most important,  particularly in relation to advising property investors/ buy-to-let clients. 
  2. How widespread is knowledge on some of these issues across the sector? Do brokers need to be better informed to advise clients properly, and do any particular gaps in this knoweldge stick out? 
  3. What can brokers do to boost  their knowledge of these areas? Do organisations such as networks, clubs and lenders help? Are there other sources brokers can turn to, ro ways to educate themselves about these key issues?  
  4. Is there a regulatory requirement to undertake continuous professional development - how does that work? Does it depend on broker or adviser status? 
  5. How can brokers  assist clients and empower them - without necessarily overpowering them with information - are there other ‘soft’ skills that can be useful alongside factual market knowledge? 

Any other thoughts on this greatly appreciated.

Comments needed by Wed next week (Feb 21). 

Many thanks

Emma 



 

7 responses from the Newspage community

Copy all

Copy

Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
Keeping up to date with economic factors and new products and rates is crucial for all brokers to ensure you are given the correct advice. However, whilst is is good to have an understanding of areas such as taxation, it is crucial not to give advice on those areas and instead advise the client to receive professional tax advice. Sometimes for some brokers a little knowledge can be a bad thing, leading to over-advising on areas not within their remit.
Copy

Editor
Michelle Lawson
Director at Lawson Financial
Broker education is ongoing as the economic climate is ever evolving and lender policy changes to reflect this. We get regular training and updates from multiple sources and have to undertake a minimum level of Continuous Personal Development (CPD) hours per year. Trainee advisors have to pass exams and reach Competent Adviser Status (CAS) before advising without supervision. Our knowledge is built over many years of experience and a good knowledgable advisor is worth their weight in gold. We like to help educate our customers within our remit as, sadly, financial education is not part of the curriculum but it should be.
Copy

Editor
Darryl Dhoffer
Founder at The Mortgage Geezer
Risng interest rates directly impact affordability and rental yields, requiring landlords to adjust strategies. For buy-to-let, staying updated on rate trends and stress testing tools is crucial. High inflation erodes rental income and increases property management costs, so understanding its impact on tenant affordability and potential rent rises is vital. Wirth regulation changes in tenant eviction laws, energy efficency standards mandate compliance and can alter investment plans for landlords - however there is uneven knowledge with some brokers, who specilise in this field, however tax complexities still exist and needs addressing. Buy To Let in the majority of cases is an unregulated market, however there are arguments for and against to fall under a regulated process, particularly with fair pricing for lenders.
Copy

Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
In an ever-changing market, brokers need to be up-to-date across a broad range of subjects. Interest rates, new products and lending criteria is key, but beyond that brokers are increasingly being asked for information on tax and regulatory changes. We've got to stay within our skillset and authority but being able to provide signposts to ensure clients are fully informed is more important now than ever. This is where our professional connections and networks are key.

In the current economy, brokers need to understand and be responsive to vulnerable clients and those in financial distress. The impact of debt on mental health is well-established and cannot be overstated. Borrowers in this category have fewer options and are often late to seek help for fear of judgement. Outside of CPD requirements on products, compliance and process, we need to ensure brokers develop their personal skillset, so they can create safe, supportive and sustainable businesses.
Copy

Gary Bush
Financial Adviser at MortgageShop.com
The life of a financial adviser in 2024 is one that needs an array of skills - technical, analytical, patience, courage, and perseverance. COVID lockdowns and the subsequent "went a bit too far" mini-budget have seen advice firms handling the same cases over and over to ensure that they chase each client into the most competitive deal for their circumstances. As a firm with A LOT of technological systems to automate our business and keep track of everything, we truly feel sorry for the more paper-based practices - life must be even more chaotic for them. We rely heavily on a number of Continous Professional Development providers to get us where we need to be with industry changes and regulatory matters - from PMS, to L&G, to Paradigm, and others, we are always keen to hear all service providers take on matters that are in industry flux e.g. Consumer Duty where differing recommendations were provided. Since launching our online client dashboard updating consumers has been much easier.
Copy

Peter Vandervennin
Director at The Mortgage Consultancy
One of the biggest market issues for brokers is taxation and incorporation strategies specifically for buy-to-let investors. Understanding the legislative theory behind these issues is crucial for helping clients and mastering brokers' authority in this arena. Dan Neadle's Tax blog highlights significant implications for clients who have received bad tax advice. As brokers, we need to be proactive because chances are either a client has been affected or a future client will be. While knowledge on these issues exists in pockets, people are often hesitant to discuss them due to wider ramifications. Networks can only do so much; they often focus on compliance rather than in-depth theoretical understanding. Property networking, though it may seem like a PR effort, can significantly enhance your knowledge and education. The role of a broker isn't to know everything but rather to have enough knowledge to keep clients informed and direct them to specialists when necessary.
Copy

Akhil Mair
Director at Our Mortgage Broker
Key Market Issues: Brokers must grasp interest rates, inflation, tax changes, and regulations, with a focus on local market dynamics for property investors. Understanding real estate-specific trends is vital for effective advice.

Knowledge Dissemination: While many brokers understand fundamental market dynamics, gaps exist, particularly in local market insights. Continuous learning is essential to offer tailored advice effectively.

Boosting Knowledge: Brokers can enhance expertise through networks, lender seminars, online platforms, and professional courses.

Continuous Professional Development (CPD): Regulatory bodies mandate CPD to maintain competence and stay updated with industry changes, varying by jurisdiction and professional status.

Client Empowerment & Soft Skills: Effective communication and client-centric approaches are crucial. Brokers should distill complex information, cultivate empathy, active listening & negotiation skills to empower clients without overwhelming them