With Christmas not too far away we’ve already started to see the number of Christmas adverts crank up. With the advent – no pun intended – of catch-up TV it’s possible of course to watch whole swathes of programmes without ever seeing an ad, however (even in this brave new world) children somehow seem able to have viewed every single advert for the toys/tech/presents they want. Clever so-and-sos.
No doubt the latest in technology will be high on most children’s (and adults’) wish lists including the very latest Virtual Reality (VR) equipment. Perhaps you’ve seen the advert with the Dad standing uncomfortably in the middle of a boy band concert recording the whole thing so his ill daughter can watch it – as if there – in her bedroom later. On her VR headset. We really are going into a whole new dimension aren’t we in terms of mixing our perceptions of reality and fantasy.
This thought occurred to me as I cast an eye over the latest financial services news recently, in particular the perceptions that both advisers and their clients have about certain products. How real are those perceptions? It reminded me of something my Granddad once said to me: “If it walks like a duck, if it quacks like a duck, and it swims like a duck…it probably is a duck.” Although now you’d have to add the caveat: “Unless you’re using a VR headset and then it might not actually be the real duck you think it is.”
But anyway, the point is that if it has all the attributes of one thing, then it’s probably safe to assume that it is the thing you think it is and it’s going to do the job you anticipate of it. Take second- harge mortgages for instance – for a long time they’ve appeared to have their own unique attributes which make them distinct and peculiarly ‘second charge’. It’s perhaps the reason why many intermediaries and advisers have shied away from them – because they have looked rather different to products which they’re more familiar with, and perhaps have more in common with.
One of the focus’ for us as a business is to try and place seconds more into a realm which is familiar to the vast majority of advisers – to point out that the products can be comparable to others in the market, and therefore can be trusted. In a short space of time, we’ve had some success in this; in fact I might go as far as to say that we could probably change my Granddad’s analogy to: “If the fee looks like a remortgage (£295), if the rate looks like a further advance (3.88%), and if it’s as easy to arrange as both those products, then it’s probably a second-charge mortgage from us.”
In this marketplace, perception is important and we’re not asking advisers to put on the product equivalent of the VR headset and to look at a product range, fee structure, service level that only exists in fantasy. What we are saying is that times have changed, and there are businesses in this market that have actively changed the nature of the second charge offering, to one that is much more up-to-date and in keeping with their own first charge reality.
Understanding this and sensing the opportunity that does exist – for instance, for those customers looking for additional borrowing but not wanting to disturb their existing lifetime tracker or interest-only arrangement – could open up a strong income stream for advisers and the right solution for clients. Add in some of the good old-fashioned must-haves such as underwriting based on real life experience, not just credit score, and you can see how the modern can be married up with the traditional.
In a sense, it’s these two elements that make for a good Christmas as well. Just don’t let the kids sit in front of the adverts too long or you could be looking at Virtual Reality far sooner than you think.
Steve Harness is commercial director of The Loans Engine
