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- 15/08/2018
- Are Mortgage Brokers Missing Out on Millions?
Are Mortgage Brokers Missing Out on Millions? Four Strategies for Winning the Custom of First Time BuyersBuying a house, particularly for the first time can be a daunting prospect. Credit checks, forms, and the huge variation of mortgage products and different lenders can be overwhelming.In spite of this, a mere 28 % of first time buyers intend to fund their house purchase using a mortgage found through a mortgage broker, with 46% intending to arrange their mortgage directly with the bank. However, at some point in the house purchase process, this attitude changes, with the percentages becoming 47% and 32% respectively.[i] In other words; the process of the house purchase makes many people realise the value of the mortgage broker over and above finding their own deal.This still, however, means that 53% of first time buyers are not using a broker, representing a market worth millions of pounds. There is plenty of opportunity here for mortgage brokers to win over first time buyers, saving these new customers huge sums in overly expensive mortgage deals in the process. The importance of a mortgage brokerThere are so many advantages in employing a mortgage broker early in the process of purchasing a property. Helping first time buyers to understand the benefits is the first step in winning their custom.· It is estimated that one third of customers do not get the cheapest mortgage available.[ii] Knowing the market well, brokers can access any new deals as they become available, as well as being able to analyse each customer’s individual circumstances and the best deal that they can get, giving clients the confidence that they are getting the most cost effective mortgage for them.· Many mortgage brokers also offer advice on the house buying process; from suggestions on paperwork, to recommendations about house surveys and insurance. This reduces the stress and worry ...- 18/07/2018
- Financial Planning Services: Make it to the Top Using Seven Strategic Approaches
Financial Planning Services: Make it to the Top Using Seven Strategic Approaches A recent poll suggests that a mere 8% of people choose to get professional financial advice when making important financial decisions.[i] However, the income that professional advice can generate is in some circumstances, almost 6000% of the initial cost.[ii] These statistics indicate that many people may not be aware of the benefits of financial advice. There is huge scope for marketing financial services to a sceptical generation. The UK needs financial advisors with motivation, drive and diligence to offer helpful, unbiased advice to clients. These advisors need a personable character that can win over uncertain clients who are looking to secure a worry-free future with wise pensions and investments.The financial services sector needs the best – and for financial advisors keen to optimise their performance, asking what can be done to get to the top is a key question. Here are seven of the most important things to consider when pursuing excellence within financial services.Know your target marketTo get to the top it is important to identify the prospective clients that you want to work with and learn everything you can about the concerns and issues that they may have - and how to resolve those issues. Become an expert in your client’s industry field. Be visible to them, by attending networking events, conferences and trade shows. It may be helpful to work within a niche industry (or even several niche industries) as you will be able to become expert in those fields, earning a name for yourself in your specialism.[iii] Earn your client’s trustExpecting a client to trust you with a large portfolio prior to earning their trust is unrealistic. In many cases, you will need to put in considerable effort before seeing a penny from a client. Consider this an investment and work hard to evidence your usefulness to top clients. 47% of clients chose their financial advisor because ...- 18/07/2018
- Can the Internet of Things Make Your Policy Holders Happier?
Can the Internet of Things Make Your Policyholders Happier?Technology has made huge advancements over recent years. One of the most life-changing may be an innovation known as the “Internet of Things” (IoT). Referring to “things” from day to day life, it can cover almost any inanimate object that can be connected to another; such as our cars, our kitchen appliances, our fitness trackers and our heating systems.In 2015, it was estimated that there were already over 15 billion connected devices. It is difficult to project how many more there will be by 2020, with industry experts suggesting anywhere between around 30 billion and 200 billion[i]. Either way, it is clear that IoT will have a huge impact on the modern world and the way we live.It is not only sectors specialising in technology that need to keep in step with the changes. In fact, almost every type of industry is affected by IoT, with the Insurance Industry, among other, seeing disruption from the technology. However, the disruption comes with lots of potential benefits. The IoT can have a great impact on the way that risks are assessed, the well-being of customers and the way that claims are handled. With careful application, this can be used to ensure that customers are happier with their insurance policies – increasing trust in their insurers and fostering brand loyalty.Assessing risk more accuratelyA number of different types of insurance can utilise IoT to give policyholders a more personalised insurance product. One example is in the use of health trackers, allowing underwriters to clearly assess the level of risk in a customer’s lifestyle when selling health insurance. The benefits of this are so huge that some companies have even started offering customers subsidised fitness trackers; on the understanding that they will reach a certain level of activity a day. This also benefits the customer because evidencing a healthier lifestyle through their fitness tracker can make them eligible for a ...- 18/07/2018
- Has Big Data Ushered Out the Age of Insurance Segmentation?
Has Big Data Ushered Out the Age of Insurance Segmentation?In days gone by, the insurance sector boasted a number of niche insurance agencies and brokers underwriting risks for specific demographics - such as women or young people. However, in recent years, the dawn of “Big Data” has given rise to exceptionally large sets of data, allowing companies to analyse such a vast range of different information that basic diversifying factors such as age or gender are no longer viable ways to segment the market. Underwriters are now able to build an individual risk profile that is not based on such sweeping generalisations, but rather on very specific details about lifestyle, finances, interests and habits, as well as a wide range of other factors.This new age of Big Data and the loss of traditional customer segmentation, gives lots of scope to insurance companies wanting to appeal to new and existing customers, through a number of approaches:Re-thinking segmentationIn the past, life stages have been largely predictable, with people studying, marrying, starting families, working and retiring - mostly in that order. Now these stages of life can happen in any order, or not happen at all, or some stages can happen more than once. Within these life stages, personalities, income and priorities are different, giving an almost infinite number of different variables and therefore an almost infinite number of different risk profiles.While risk and policy pricing is no longer driven by segmentation, there may be new ways to segment clients; by the way they like to receive product information; advertising likely to appeal to them; the payment methods they will want to use; the amount of paperwork they are likely to have the patience to complete and many other factors that may assist with successful marketing and advertising.A personal profileWhile access to Big Data runs the risk of companies viewing clients as mere sets of facts and figures, there is also scope for the opposite. With ...- 18/07/2018
- Shocking 91% Pay Gap Raises Questions about Financial Sector’s Glass Ceiling
Shocking 91% Pay Gap Raises Questions about Financial Sector’s Glass CeilingRecent pay gap records submitted by large UK corporations have revealed that for the highest earning workers within the financial sector there is a huge 91% pay gap between men and women. The discrepancy is caused by more men than women within senior roles, with the difference in the number of men vs women in these high earning positions having increased by 17% in the past six years. This indicates that the glass ceiling stopping women rising to the top within the financial sector is stronger than ever. [i]It is natural to ask, “how can this be possible in the 21st Century?”A study of the reasons why, reveal a lack of easily identifiable causes, with some articles suggesting simply that there are few women in senior finance positions because there have always been few women in senior finance positions. In other words, perhaps it is a symptom of a sector that is averse to change. However, the industry must change in order to survive; not only for the sake of a fair sector and diverse operations, but also because hiring more women in senior positions is integral to the profitability of the companies and the good of their clients.Why does it matter?Firstly, in modern society a truly diverse group of employees is not only ethically and legally demanded but is also vital to the functioning of a company. How can one expect to appeal to a diverse modern world if one does not employ diversely?Indeed, we see that the lack of women in finance has a huge impact on profit. Across 6 wealthy developed nations, a survey found that over 50% of high earning women do not have a financial advisor. In the US, 44% of the women in this bracket who do have a financial advisor, feel that their advisor does not understand them.[ii]The industry needs to change. The missed assets in the US alone from this apparent marginalisation of women may amount to a staggering 5 trillion dollars.[iii]Surely more women in ...- 18/07/2018
- Problem or Potential? Considering Ethical Artificial Intelligence in the Financial Sector
Problem or Potential? Considering Ethical Artificial Intelligence in the Financial SectorArtificial Intelligence is being used across multiple industries worldwide and is seeing dramatic growth. Annual investment by Venture Capitalists into US AI start-ups has seen a six-fold increase over the past 17 years.[i] The financial sector is one industry which can enjoy multiple benefits from the utilisation of AI. Statistics suggest that over the next three years, AI could decrease bank’s costs by 3.9%, while increasing revenues by 3.4%. The dawn of AI in the sector is good news for customers too, as AI can improve processes for savings, investments, risk assessments and loans; in fact, across almost all aspects of financial services. However, with the rise of AI, has come concerns about the ethics surrounding its use. Worldwide, there has been much debate about how to develop and use AI in a responsible way. The House of Lords has produced a report on the ethical use of AI, highlighting a number of principles that must be applied to the development of AI.[ii] This includes the following:The common goodThe House of Lords Select Committee highlighted the importance of all AI development being for the common good of humanity. Though AI focused on improving healthcare, education and the environment may seem to be more in line with this mandate for “good”, there is no reason that the financial sector cannot also have a thoroughly ethical framework for AI development. AI within financial services can be focused on creating systems, processes and advice that are accurate and helpful. AI can give immediate responses to queries and offer instant transactions. It can help to identify anomalies, thus potentially exposing fraud or error. Indeed, a government review identified the three areas with the most potential for AI to be in anti-money laundering and fraud detection, as well as personal financial planning.[iii] The aim should be to create an AI that helps its customers ...- 18/07/2018
- What Should You Do About the Insurance Distribution Directive?
What Should You Do About the Insurance Distribution Directive?The European Union has issued a new directive governing the regulation of the insurance industry, to replace the 15-year-old Insurance Mediation Directive (IMD). As with the IMD, the Insurance Distribution Directive (IDD) will mostly be transposed through the Financial Conduct Authority (FCA) rules within the UK. The Financial Services and Markets Act (FSMA) will be amended to incorporate any changes.[i]The FCA have published an imposing 444 page document of the near-final rules. [ii] It is easy to be intimidated by the new regulations, but with a series of timely steps and a little forward planning, it will be possible for insurance companies and brokers to be confident that they are following the rules correctly, with as little disruption as possible.What is the Insurance Distribution Directive?The new directive aims to level the playing field across the insurance industry, EU-wide. It applies to a wider range of insurance selling services. As well as underwriters and brokers it will apply to all companies that sell insurance as an additional service (with some exceptions.) This may include airlines selling travel insurance or price comparison websites.The directive will also demand additional levels of competency and service from insurance sellers and distributors. These include:· Continuous professional development; evidence that all employees have had at least 15 hours of additional training per year.· Clarity on the products being sold; with documentation on the product and clear information about any optional add-ons, including whether they can be purchased separately.· Superior products and product oversight; products are to be reviewed and developed with a clear, specified target market.· Full ...- 20/04/2018
- A Guide to Personalised Number Plates: Is Your Fully Comprehensive Car Insurance Really Fully Comprehensive?
A Guide to Personalised Number Plates: Is Your Fully Comprehensive Car Insurance Really Fully Comprehensive?With many millions of private number plates in the UK, personal plates are big business. Many of these numbers are purchased as an investment and kept without being used on a car – but most are used on vehicles throughout the country, giving a personal aspect to the dreary necessity of a vehicle registration plate.However, many people don’t realise that without specific agreement with your car insurance provider, the cost of the number plate may not be recovered by the policy holder in the case of the car being stolen or written off. Read on for our guide to personalised number plates and how to protect them.Where can you buy personalised number plates, and how much do they cost?Number plates can be bought from the DVLA or through a private seller, with the most expensive UK plate to date being a massive £518,480 for the number “25 O.”[i] Of course, most people wouldn’t consider spending half a million pounds on a number plate; but there are many thousands of people who do spend significant amounts on private plates that mean something to themselves or their loved ones.Many of the personalised plates in the UK are not actually used on the road. The rights to them are kept on a certificate (that needs renewing every ten years – or more frequently for numbers purchased before 2015.) This can be made into a plate that can be used as a decoration, or just kept until the “perfect vehicle” is found.Registering your plateWhen you purchase the rights to use a personalised number you will receive a certificate of entitlement in the form of a V750 or V778 document. When you are ready to register the number plate to a vehicle, you need to use this document to assign the number to the relevant car. At this point you will be sent a new V5C log book for the vehicle, detailing the new registration number. The new number plates must be fixed to the car before ...- 20/04/2018
- Are Permanent Job Placements a Financial Risk or a Company Investment?
Are Permanent Job Placements a Financial Risk or a Company Investment? With the uncertainty of the current economic climate and the prospect of Brexit looming, many companies will be asking themselves whether taking on new permanent employees is worth the risk. Are contractors, by the nature of the short-term responsibility towards them, the better option? A new study of professional recruitment trends suggests that in fact, employers are willing to take a chance on permanent staff members. The study has found that UK employment is seeing an increase in permanent job positions and a decrease in vacancies for contractors. While the number of vacancies for professionals has seen a steady increase across the board (0.3% per year), permanent roles available for financial services professionals has seen the biggest rise, with a huge annual increase of 16%.[i] So what might have caused this leap in permanent vacancies?The financial future is not so bleakWhile some MDs and CEOs are understandably concerned about the uncertainty surrounding Brexit, the general opinion currently seems to be that it will not have a devastating impact on most sectors. The financial services sector in particular doesn’t appear to be over-anxious and companies are even identifying new opportunities for the future; opportunities that will require the support of a skilled and forward-thinking team.Efficiency, dedication and loyaltyFull time employees get to understand the ethos of the company and the issues that are vital to the business. They are able to share this ethos with clients and customers. Long term employees learn systems and processes, making their day-to-day work more efficient, saving the company money. There is the opportunity to motivate full time staff, with bonuses and commissions for bringing in business. Permanent staff are likely to be dedicated to the company, as they know that their continued employment relies on company doing well. Professional developmentIt is worth ...- 20/03/2018
- Compete or Collaborate? What Next for Traditional Financial Services vs. FinTechs
The financial crash of 2007-2009 saw a massive increase in the regulation of the financial industry, allowing space for agile and responsive financial technology (FinTech) firms to disrupt the market, showcasing themselves as serious competitors within the financial industry.The need for quick technological advancement within the financial sector saw lots of the major banks developing their own technology departments. At the same time, many smaller financial firms have found that the most economically viable solution is to collaborate closely with existing FinTech firms. This involves combining their own traditional financial services with the forward planning and emerging technology of the FinTechs.[i]Indeed, it appears that FinTechs and traditional companies have lots to offer one another, with the salient aspects of both organisation types being integral when it comes to what consumers want.What do traditional financial services have to offer?When customers are placing their money with a financial institution, they tend to prefer working with an established, traditional financial service. This lack of a trusted, traditional brand holds the FinTechs back from being able to gain control over the market. The FinTechs are finding that collaborating with long established companies is a mutually beneficial arrangement. In fact a report from LinkedIn found that 75% of FinTech firms indicate that their primary goal is for collaboration with current traditional financial service organisations.[ii] The same report concluded that most FinTechs were destined to fail without the increased trust, visibility and scale afforded by this type of collaboration.[iii]Speed vs. a personal service – are both important?More and more, customers want the immediacy that can only be provided by technology; immediate decisions on loans, immediate responses to queries, immediate transfers of cash. However, at the same time, they still require the one-to-one customer services provided by ...