Brokers urged to evolve as AI and policy changes could reshape market
The mortgage broker sector may face significant disruption in the coming years as both artificial intelligence (AI) and regulatory changes open the door for borrowers to bypass intermediaries, according to industry leaders.
Brokers currently originate around 90% of new mortgage sales, based on data from the Intermediary Mortgage Lenders Association. However, participants at a recent industry roundtable warned that brokers’ dominance could be at risk unless they innovate and demonstrate clear value to clients.
The event, titled The Mortgage Market in 2035, was hosted by communications consultancy MRM and gathered executives from across the mortgage industry.
Rob Jupp (pictured left), chief executive of the Brightstar Group, cautioned that large banks are investing heavily in AI technology with the intent of regaining lost ground.
“Now branches don’t really exist anymore, it’s made the whole virtual marketplace acceptable to customers, which is where AI can play a huge role,” he said. “I do worry that some brokers make assumptions that every year, enough deals will fall into their lap.”
Jupp added that brokers must adapt their offerings, as AI is increasingly able to manage routine tasks such as sourcing competitive rates.
Regulatory developments are also posing challenges. The Financial Conduct Authority (FCA) is consulting on changes that would make it easier for consumers to deal directly with lenders through execution-only channels. A key proposal is to remove the “interaction trigger” introduced under the Mortgage Market Review, which previously required full advice to be given once a firm had any interactive discussion with a borrower.
In its consultation paper CP25/11, the FCA acknowledged that eliminating this requirement could lead to more borrowers bypassing brokers. The regulator’s modelling indicates that intermediary market share could drop by 7.5%, potentially resulting in a loss of over 97,000 transactions annually—equivalent to £116 million in commissions and fees.
Tanya Elmaz (pictured centre), director of intermediary sales at specialist lender Together, advised brokers to prepare for rapid change. “When I go to a mortgage advisor now, I want advice on retirement and my will and everything else,” she said. “I want more than just a broker picking up the phone and saying my current deal is coming to an end.”
She noted that consumers increasingly expect a comprehensive advisory experience, with younger customers especially inclined to use digital tools for financial decisions.
John Davison (pictured right), head of product, proposition and distribution at Perenna, warned that basic “order-taking” advice models are unlikely to survive. He stressed the importance of advisors delivering a thorough needs assessment, rather than simply confirming customer choices.
Davison argued that true value lies in aligning financial products with long-term goals rather than just providing the lowest rates. He also emphasised the broader role advisers play in financial literacy.
“Helping people understand complex issues like income tax and credit scoring is really important,” he said. “The brokers who use AI and technology as part of the ongoing holistic advice process will thrive in this new future. Those who look to use it to just remove humans from the advice process may find they end up left behind.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
