Using Finance Brokers
Finance brokers are a tried and tested route for securing the best deal across a range of products on the UK financial services market. One of the primary reasons for using brokers as opposed to going straight to the necessary lender is the desire to secure exclusive, efficient and money saving deals. However, with the advent of comparison sites, some financial products are sourced by borrowers through specifically designed comparison websites.
For higher end and complex products though, lenders remain one of the best and most successful routes of securing a deal. For example, applying for a guarantor loan is now very commonly done online via comparison websites whilst products such as high value insurance policies, bridging loans and invoice factoring, will tend to need the contact and expertise of an experienced broker to secure a good deal (source: Dicendum Group).
For example, a borrower may need to involve third parties as part of the brokerage or transaction process and will need a network of relevant experts as part of such an application. This is where brokers are often best utilised. Additionally, where there are technicalities to be explored and considered, for example when using loans for business purposes, brokers are a logical consideration.
Property and Insurance Products
Property-related products such as mortgages, bridging loans and equity release as well as higher value insurance products such as for larger properties or commercial ventures often lend themselves to a broker. Rather than the applicant(s) going via a comparison website, they will need to have an expert in the relevant field for numerous reasons:
Human Experiences – Unlike lower-value products, using a comparison website will often only get the applicant as far as a point of contact with the broker in question. Understandably, few people are comfortable parting with what can amount to tens of thousands of Pounds for a product without having conversations and consultations with a human party in the process. Comparison sites and search engines are good at leading prospective applicants to brokers, but not necessarily converting the applicant to a customer directly.
Experience in Tough Industries – Comparison engines can be very good at brokering a service or product where the price is the main variable and deciding factor. However, some services such as equity release and others require negotiation and appraisals. In such cases, a broker will be able to use their network of contacts and their experience to broker a deal in a way a computer algorithm cannot.
Brand Loyalty – Consumers in the 21st Century tend to be less loyal to brands in a way that was the case years ago. Because of this and because of the margins involved with property and insurance-related products, a cheaper policy or product can in fact save the applicant many thousands of Pounds. With their network and panel of providers, brokers can negotiate with various providers to get the applicant the best deal. However, for lower value products such as everyday car insurance, comparison sites to this job impeccably.
Specific Financial Products
Another of the main reasons for applicants going through brokers as opposed to very established and successful comparison engines online is when the product or financial service they are seeking is very specific. These types of products are also often limited to higher end insurance policies, tricky cases and properties that need surveys, valuations and appraisals. Other types of products are those where close attention to detail is required, for example when insuring the staff of a business.
Such products can include:
- Vintage Car Insurance
- Boat Insurance
- Aircraft Insurance Policies
- Commercial and Development Finance
- Liability Insurance Policies
In cases of products such as the above amongst others, a surveyor or valuation expert may need to be sent to assess the project in question. In these cases, if a broker has a service provider they know and use regularly for their relevant services, it can save the applicant a lot of money.
All of this though is not to say that comparison sites and engines online have no place; quite the contrary. In fact, more people than ever are using comparison sites to find the perfect provider for all nature of everyday financial products and services. For example, car insurance, travel insurance and buildings and content cover are routinely found and secured via these channels.