Regulators should consider a mandatory three-day product withdrawal process – Murphy
You would have thought attending an industry wellbeing event at a spa retreat might provide mortgage adviser attendees with a rare opportunity to switch off, relax and spend just one day away from the everyday pressures of their working lives.
I was fortunate to be invited to such a day recently – an excellent event, but one that I’m afraid highlighted the challenges advisers are facing and the inordinate amount of pressure many are under.
The reality of the day being that I saw at least two advisers spending their breaks and lunchtime having to open their laptops and work on mortgage applications because lenders were withdrawing products and they couldn’t risk their clients missing out.
You really couldn’t make it up, and while there is something almost comical about advisers being unable to relax at an event specifically designed to help them do precisely that, it would be funny were it not so serious.
A profession under pressure
During a discussion with the lender attendees at the event, the question was raised about whether, to help mitigate against the need for this, they could actually provide more notice before withdrawing products. Needless to say, the strength of adviser feeling in the room was extraordinary.
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I’m not talking about a few advisers having a moan about a slightly frustrating aspect of their working lives, but experienced, successful mortgage professionals becoming visibly emotional about the pressures they are facing due to this.
Earlier this month, I also attended the Mortgage Industry Mental Health Charter (MIMHC) lunch in London, and surely the fact our industry has felt such a pressing need to establish its own mental health charity should tell us something about the pressures people are under?
I’ve personally lost a good friend within this profession to suicide, and while nobody should suggest there is ever one single cause behind such a tragedy, I know only too well how serious the pressures of this job can become.
Which makes it even harder to accept that we continue tolerating working practices that are clearly contributing to unnecessary stress, anxiety and, in some cases, driving good people away from the industry altogether.
When did this become ‘normal’?
Somewhere along the line, we’ve developed an attitude towards short-notice product withdrawals – and the huge amount of work they engender – which effectively amounts to ‘it is what it is’, with advisers expected to accept whatever lenders decide and somehow make it work.
But why should we? Particularly when the consequences extend well beyond an inconvenient evening spent submitting applications. I’ve spoken to advisers who worry about going on holiday without reliable internet access, because they’re concerned a lender might withdraw a product while they’re away and their clients could lose out.
Meanwhile, those same lenders quite rightly protect their own employees’ holidays and personal time, ensuring they can switch off without being expected to answer emails or deal with work. So why is work/life balance apparently something lender employees deserve, but the advisers responsible for delivering so much of their mortgage business do not?
And please don’t tell me that any sort of alternative, longer lead-in time would put them ‘underwater’, or that somehow keeping application systems open over the weekend is some wonderful concession to advisers. Because what that actually means is you’re also expecting us to work Saturdays and Sundays while your own staff are at home.
If the system crashes, as we’ve seen happen, who exactly are we supposed to contact when nobody at the lender is available to help?
Consumers are paying the price too
There is another hugely important issue here, which is the impact these practices have on borrowers and the quality of the advice process.
Taking out a mortgage is potentially a 25- or 30-year financial commitment, and surely consumers deserve sufficient time to consider their options, discuss recommendations and make properly informed decisions?
Instead, advisers can find themselves telling clients that the mortgage discussed earlier today must be applied for immediately because the lender is withdrawing it tonight, and they need every outstanding document within hours.
How exactly does that support good consumer outcomes, particularly when Consumer Duty places such importance on ensuring customers understand their options, have time to digest all relevant material and recommendations, and receive appropriate support?
Three days is hardly unreasonable
Following the post-‘mini Budget’ turmoil of autumn/winter 2022, we heard plenty from lenders about commitments to improving withdrawal communications and giving advisers reasonable notice, yet four years later, we’re still having much the same conversations. In fact, you might say it’s got a lot worse across a lot more lenders.
Coventry has demonstrated that longer notice periods are perfectly achievable, so why do other major lenders continue behaving as though three working days’ warning is some impossible operational challenge?
These organisations have sophisticated pricing teams, extensive historical application data and the ability to forecast business volumes, while spreading applications across three days could actually reduce the pressure their own systems experience.
Of course, genuinely exceptional market circumstances might sometimes require faster action, but exceptions have become the standard operating procedure for too many lenders. If a lender genuinely cannot provide three working days’ notice, perhaps it needs to examine its own processes rather than expecting advisers to reorganise their working and personal lives around its shortcomings.
Or maybe, if lenders are unwilling to make these changes voluntarily, then perhaps it is time for the regulators and industry governing bodies to step in and make three working days’ notice of product withdrawals a requirement across the market? We’ve spent years asking for improvements, listening to commitments and watching many of those commitments fall by the wayside, so perhaps the time has come for a more formal approach that ensures all lenders operate to the same minimum standard?
We spend an enormous amount of time discussing the difficulties in forging strong adviser wellbeing, in attracting new talent and retaining experienced professionals. Lenders should be aware that their practices in this regard undoubtedly contribute negatively to all those areas.
The industry has accepted ‘it is what it is’ for far too long, and my own and adviser colleagues’ ongoing work experiences need to change. I think it’s time lenders recognised that advisers deserve better, consumers deserve better, and things simply cannot carry on as they are.
