Press comment: FCA mortgage paper on switching illustrates the value of advice

10 March 2020

If you are covering the FCA’s research paper on mortgage switching published today, please see the following comment from Karen Noye, mortgage expert at Quilter:

"It is a great time to remortgage at the moment, with so many good deals on offer. We remain in an era of incredibly low-interest borrowing and if you don’t shop around you could be missing out on the best deals available. Not only are many lenders offering extremely competitive rates, but there is also the opportunity to fix for a relatively long time at a low rate. Many people have taken advantage of the low interest rate environment to lock-in to a favourable rate of interest in order to give themselves a sense of certainty and security.

"This data shows that customers that took out a mortgage through an adviser are more likely to remortage at the end of their term, whereas ‘DIY’ borrowers tend to be more likely to roll-over onto the SVR. A willingness to search out a better deal keeps mortgage lenders honest and ensures a healthy, competitive market. Interestingly, there isn’t a huge gap in the household earnings of ‘switchers’ compared to ‘non-switchers’. This implies that the problem is common across households up and down the country within different earnings levels, and isn’t isolated to high earning households that don’t see the value in getting a better deal.

"Sadly, a lack of shopping around and switching is a familiar theme. In other financial markets, most notably in the retirement market, evidence shows that consumers often struggle to shop around for the best deal. This caused major problems in the annuity market, and continues to be a challenge in the drawdown market, where non-advised customers often stick with their incumbent pension provider instead of switching. Similarly, there has been a lot of work done to encourage bank account switching over fears that consumers were not getting the best deal for them. And there is a lot of publicity around the importance of holding general insurers’ feet to the fire every so often to ensure you’re getting the best rate. In the case of a mortgage, it is the biggest single expense for millions of households and getting the best rate available by shopping around at the end of your term is crucial."

For more information contact

Alex Berry
02380 726260
07741 151931

    Mike Glenister
    02077 789638
    074 6914 4535

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £95.3 billion in customer investments (as at 31 March 2020).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform and Quilter International, including AAM Advisory in Singapore.

The Old Mutual Wealth Heritage life assurance business was acquired by ReAssure Group Plc on 2 January 2020.

Since its IPO in June 2018, Quilter plc’s businesses have progressively rebranded to Quilter, as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Quilter Financial Advisers (previously Charles Derby Group)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Investment Platform in 2020)
  • Quilter International (previously Old Mutual International)

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.