Trussle are the UK’s first online mortgage broker, have just raised £4.5m in a Series A and have an exclusive partnership with the FTSE listed property search giant Zoopla. So they are doing well for a two year old startup 🙂
As often it’s the old-fashioned and unsexy stuff that is ripe for disruption. In the case of mortgage advice though there is another astounding nanny state regulatory change that has made it even more important to have a low cost Fintech solution.
In essence (FCA summary here) in the UK if you want to keep certain legal protections (not defined but being able to complain about mis-selling appears to be one) you must take mortgage advice :-! And this advice can be quite expensive as we shall hear.
And if you want to talk about a world orientated around the 0.1% (corrupt state?) if you are part of the 0.1% – then like taxes you don’t need to bother! Golly gosh. And if you think I exaggerate check out the FCA’s webpage in re.
So can Fintech ride to the rescue?
Well apparently it can, although what is defined as “advice” is very fluid in a world spanning old-fashioned advice and more automated Fintechs. In LFP069 we discussed advice on your asset side of the balance sheet. In this context LFP070 is about advice on the liabilities side of your balance sheet.
Trussle’s strapline is:
The hassle-free way to get a mortgage online. We search more than 11,000 deals from 90 lenders to find the perfect mortgage for you.
Not only that but you can enter your mortgage details at the moment and they will monitor all those deals on an ongoing basis and let you know
All this and more is discussed on the show, including:
– catching the entrepreneurial bug
– Ishaan’s career journey
– the importance of networking and combining experiences to enable a good start in Fintech
– UK mortgage market is ~£200bn+ each year; 1.2m individual mortgages; the average UK mortgage is around £190k; 15,000 independent high street brokers
– advice is now mandatory (as above) :-O [following MMR – Mortgage Market Reform]
– as per LFP069 on investment advice an adviser can no longer take commissions from the providers but must charge a fee. However with mortgages commissions (&fees) bother remain legal options. #AsymmetryAlert..
– mortgage brokers earn a commission of around 0.35-0.4% (which equates to ~£700 on an average mortgage); some advisers charge the client too – from ~£300 to 1% of the mortgage amount. Either way the total amount needs to be disclosed.
– “agency risk” – conflict of interest in these circs. The CMA (Competition and Markets Authority) is writing a report in re.
– Ishaan sees technology as a way to avoid biases/conflicts of interest in a way that can be easily audited
– Ishaans case study of his own problem getting a mortgage in the past which led him in the direction of helping others avoid a time consuming and unsuccessful hunt for a mortgage
– mortgages are complex in terms of requirements – this makes it a time consuming process. There are 90 lenders in the market and each will have different criteria. How Trussle handle this.
– the average time to complete a Trussle form is 12 minutes (compare to weeks it might take to get an appointment with a bank to even see them and then the meeting won’t take less than 1.5hrs)
– the internet as a good way of implementing quality control (with for example Trust Pilot et al)
– Trussle started out trying to build a roboadviser – a totally automated solution – but came to realise that, especially as this is the most important financial decision of people’s lives, human interaction is also necessary
– the balance between computer and human advice
– Trussle’s journey; currently a team of 20
– £1bn of mortgages under management – how to get your mortgage managed (for free) too
– the average figure is most folks could save £3,500 by switching mortgage
– Trussle’s expansion plans
And much much more 🙂
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