Brokers should review the FCA’s expectations for every element of their business first to ensure they are in the best possible place to make changes once the changes are confirmed at the end of the month.
The obligation is mainly focused on ensuring good results for consumers. With this in mind, there are four outcomes that companies are required to achieve:
Products and Services: All products and services must be fit for purpose and designed to meet consumer needs.
Price and value: All consumers should receive fair value.
Consumer understanding: Communications should support and enable consumers to make informed decisions.
Consumer Support: Businesses should provide a level of support that meets consumers’ needs throughout their relationship with the business.
2. Lean on technology
The new consumer obligation requires brokers to ensure that their customers understand the products offered to them and to provide quality support throughout a customer’s relationship with the company.
Brokers can benefit from sophisticated technology to deliver this level of service without stretching capacity. These sophisticated platforms can, for example, automate emails to help brokers stay in regular contact throughout a client’s mortgage journey and ensure they find the information needed to help clients access the good product.
Plus, with additional API-integrated services and tools, brokers can also provide protection, title transfer, or general insurance quotes through the same platform.
3. Protection advice is essential to provide comprehensive customer support
To meet the FCA’s requirement that clients’ needs are met and that they receive appropriate support, brokers must ensure that they have frank and open conversations with clients about their need for protection. For example, some clients may not have life insurance or have a plan that does not meet all of their needs.
To meet updated FCA requirements and as a measure to help close the protection gap in the UK, brokers should take stock to assess whether their clients have adequate cover and whether they should consider to move to a larger plan.
By staying in regular contact with clients over time, brokers can improve their understanding of each client’s needs and ensure that clients are covered even as situations change.
4. Finding the right mortgage club is essential
For brokers to meet the FCA’s requirement to provide products that are fit for purpose and designed to meet consumer needs, working with the right club is essential. A good mortgage club will provide advisors with product access, often exclusive, to ensure that the broker has all the tools necessary to help their clients find the best deals.
It is vital for brokers to regularly assess whether their current club supports them to, in turn, better support their clients. For example, brokers should take the time to determine if the club offers an appropriate protection panel as well as a mortgage panel, or if it provides advanced technology to help them streamline processes and spend more time ensuring customers are properly served.
5. Use tools to ensure all customers receive fair and equal treatment
For many customers, purchasing insurance or a mortgage product is the most costly financial decision they have to make. At a time of heightened financial vulnerability resulting from COVID-19 and a spike in the cost of living, changes to consumer obligations aim to ensure a high level of customer service.
To ensure that brokers treat all customers fairly, they must take steps to understand the needs of all customers, including developing accessible communication plans tailored to customers, regardless of their level of vulnerability. Having simple measures, like a technology platform that allows brokers to record clients’ preferred method of contact and automate touchpoints accordingly, ensures that all clients receive personalized service to achieve the same outcome. .
*Mel Spencer is head of finova Payment & Mortgage Services