Calls for ‘robo advice’ to be utilised by mortgage advisers

Mortgage advisers are being called to embrace ‘robo advice’ to help deter possible threats to business and improve client retention.

JLM Mortgage Services reportedly feel that advisers should more readily harness ‘robo advice’ and be willing to implement the technology into their existing business. With an aim to improve direct-to-consumer communication, the mortgage and protection network feel that some advisers are yet to acknowledge the technological developments that are currently in process amongst lenders for example.

They believe that lenders who are already utilising ‘robo advice’ as a way to capture borrowers could pose a threat to mortgage advisers. As a way to intercept and prevent potential clients from following an internal ‘robo advice’ route, JLM state that advisers need to adapt.

The network also draw attention to the shift towards technology amongst older as well as younger generations, with an increased demand for online customer service. As well as harnessing a ‘robo advice’ service that would just capture the customer initially, JLM state that advisers should make the most of the technology, creating a path for the client to follow and improving the chance of retaining the customer as they move through the process.

Sharing his thoughts on ‘robo advice’ and the opportunities it could hold for advisers was Rory Joseph. The Director of JLM Mortgage Services stated: “There is an awful lot talked about ‘robo advice’ in the mortgage market and some advisers might simply be turned off by this, and/or could be underestimating just how these propositions might change the way customers access advice. Clearly the direct to consumer propositions have made a lot of noise, with a lot of marketing budget, and some advisory firms may be blasé about the threat they pose to their business, and to a large extent I agree that this might not be earth-shattering.

“However, where ‘robo advice’ will make a huge difference – and we’re already seeing this – is the way lenders utilise an internal version. That’s where they’ll contact existing customers electronically, asking them if they want a new deal, while waiving the ERC in order to secure their business. This will appeal to customers who are used to ‘consuming’ online and don’t want to speak to advisers or bank staff and the like. At the pace this is going, this type of activity could well become the norm, with a retention process automated by lenders becoming a dominant force.

“This is why we are urging advisers to embrace ‘robo advice’ and, at the very least, ensure they have access to an automated process themselves that can deliver in this area. I think we have to get away from the mindset that this can only be a threat – it is, but it can also be an opportunity and a valuable tool that can help advisers provide the service their clients want and retain their business.”

The calls from the network follow yesterday’s launch of the Industrial Strategy put forward by the Government. With an aim of harnessing technological opportunity, Business Secretary Greg Clark set out the Strategy’s long-term vision, focussing on the improvements for productivity and UK earning power by embracing technological change.

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