“The future of intermediaries belong to those who are prepared to adapt”
The UK’s mortgage intermediary sector has grown to dominate distribution, but it is approaching a period that will test how brokers define their value and how firms replace experienced advisers leaving the market.
“One reason the intermediary sector has grown so strongly is simple: the mortgage market has become more complicated,” said Nick Hayes (pictured top), managing director at Pia Financial Solutions. “Affordability rules, interest rate volatility and a wider range of products mean many borrowers struggle to navigate the market alone.”
Hayes argued that complexity, rather than volume, is the durable advantage for advisers. He pointed to an “uncomfortable reality” that many brokers concentrate on straightforward employed borrowers, basic remortgages and product transfers, which are profitable but exposed as lenders invest in faster processing.
“If a broker’s value proposition is limited to facilitating simple product switches, that value will almost certainly erode over time,” Hayes pointed out. “The true strength of the intermediary model lies in solving problems.”
He highlighted the parts of the market where underwriting nuance still matters, including complex income cases, self-employed applicants, impaired credit, unusual property types and later-life lending. In his view, these cases are less susceptible to standardisation and require judgement that cannot easily be replicated by automated systems.
Technology, he suggested, will not simply displace advisers but separate firms that deliver advice from those that primarily process transactions. The implication is that lenders’ investment in digital tools could compress margins on simple cases, while raising expectations of speed and quality across all cases.
Borrower profiles, Hayes noted, are also shifting in ways that make advice more central. First-time buyers increasingly need structures such as family assistance, shared ownership, joint borrower sole proprietor arrangements, or longer terms. Later life lending is growing as borrowers refinance interest-only loans or manage borrowing into retirement. More flexible incomes, including self-employment, can fall outside traditional models and require careful presentation and lender selection.
Alongside demand, Hayes flagged a supply-side issue: the industry’s ageing workforce and a lack of succession planning in some firms. “A large proportion of UK mortgage advisers are now approaching retirement age,” he said. “Many built their businesses during the rapid growth of the intermediary sector in the early 2000s and have decades of experience, but relatively few have clear succession plans.”
Hayes warned that adviser numbers could fall “at the very moment demand for advice continues to grow”, particularly if firms fail to recruit and train new entrants. He also suggested the traditional self-employed, commission-led model can deter younger candidates, and that the next generation of advisers – Gen Zs – is more likely to expect structured development, modern systems, and clearer progression than the “sink or swim” approach associated with parts of the market.
Finally, Hayes pointed to diversification as a response to both client demand and commercial pressure. Brokerages that broaden into protection, insurance and financial planning may be better placed to retain clients and reduce reliance on one-off mortgage transactions, particularly as technology reshapes the easier parts of mortgage distribution.
“Firms that position themselves as holistic advisers rather than single-transaction brokers are likely to build stronger client relationships and more resilient revenue streams,” he said.
Hayes pointed out that while the industry faces a number of clear tests, there are significant opportunities ahead for those brokers who face into these challenges, while those that rely on the easiest cases and the older business models may find themselves left behind.
“In short, the future of mortgage intermediaries remains bright but it will belong to those who are prepared to adapt,” he concluded.
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