‘Persuasion is the key to second-charge acceptance�...

Argued reasoning is the best way to help second-charge lending gain greater traction in the wider lending market, according to Fluent for Advisers and Zing Mortgages.

“In the aftermath of MCD, many people in the sector believed that because secured loans were now expected to be part of the client conversation around capital raising, it would be the goose that laid the golden egg for new secured loan business,” says Jeff Davidson, head of intermediaries at Fluent for Advisers.

“That sense of entitlement certainly got up the noses of many brokers I have spoken to. Advisers are not so easily overawed by anybody telling them what they should be doing without a valid argument.”

He added: “Our role at Fluent has been to point out where a secured loan is most appropriate and show brokers how they can make a different for clients looking to capital raise. The feedback we have received and new business generate have been very positive as a result.”

Fluent for Advisers is the intermediary arm of Fluent Money Group, which specialises in second-charge lending as a packager and distributor.

Paul Flavin, Zing Mortgages’ managing director, says that mortgage brokers are often advising on expensive decisions and so should work on the basis of reason rather than emotion.

“My advisers were understandably wary of a sector of which many had little previous experience. Yet we were very aware of the regulator’s expectations as well as the growing clamour from certain providers that we ‘had to’ offer secured loans,” he said.

He continued: “However, to me it was important that we took the trouble to understand how secured loans could fit into our advice portfolio, rather than be bounced into it.”