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FINAL STEPS TO THE MCD

By Bradley Moore

With just weeks until MCD implementation on the 21st March, this is an interesting snapshot in time. As I write this, the vast majority of master intermediaries and lenders have switched over to the new regime and some have taken the stance that they will continue to operate under CCA and will no doubt switch any day now. The good news is that cohesion between the majority of lenders and master intermediaries meant that most of the industry switched at the same time. Ultimately, this will have smoothed the edges of the transitional period which we all feel would have had benefits to not just the firms themselves but most importantly their customers.

At Brightstar we switched on the 15th February, the date that the sector ‘community’ agreed. This wasn’t without its mild challenges as we looked to understand new systems and processes, not only internally but also with our lender panel. When we switched we decided not to run a dual process of MCD compliant and CCA compliant, and simply switched completely to MCD. Three weeks later and I am confident this was a sensible decision. Keen to enhance our customer experience, we didn’t feel that operating dual processes would be an ideal outcome for our intermediaries and clients alike. We were keen to run a ‘business as usual’ approach as early as possible.

We are very much in the throes of an important change in the mortgage market and to this end we have adapted our working principles and upskilled our knowledge with the numerous propositions and different products available and similarly changes in lender criteria. There is a significant and regulatory requirement for second charge brokers to fact find and ensure they are not ‘order takers’, if indeed they have been previously.

I am excited by the prospect of our business consultants fully exploring their clients’ needs and circumstances and consequently making a recommendation that is best suited to them. As part of our internal continued professional development programme, our CeMAP qualified business consultants have been undergoing a refresh in providing professional advice to clients. We have paid particular attention to the MMR thematic review paper, including the needs to probe our clients’ stated preferences.

Advisors are more likely to achieve positive customer outcomes when they take a joined-up approach to the overall mortgage recommendation, and explore priorities and any necessary trade-offs. The MMR review found that the best advisors considered the potential advantages and disadvantages of shorter and longer term products, coupled with a shorter or longer mortgage term, and/or flexible features, such as the ability to make overpayments. Although customers are responsible for their own decisions, our consultants must be confident enough to use their knowledge, skills and judgements in making that suitable recommendation.

Since going live last month, we have already provided advice and made recommendations different from what our customers thought they required before approaching us. The outcome has resulted in not only a better customer experience but a compliant, refreshing way of working, exactly as our first charge partners would.

I know that providing an approachable and professional service for all our customers enables them to make the best decision. Ultimately, by aligning second charge mortgages with the first market, I firmly believe this will open up new positive opportunities to mortgage intermediaries. There no doubt will be some challenges along the way and I am sure everyone is keen to see how successfully these changes will land in the industry.