With the Financial Conduct Authority (FCA) set to publish the findings of its review of the motor finance sector in November, it’s fair to say that car dealer sales practices have never been under greater scrutiny than over the last 12 months.
Although this comes at a time when the future role of motor retail is up for debate and discussion, a recent report on UK car finance by market intelligence agency Mintel found that dealers still lead the way when it comes to providing information on and selling car finance.
According to Mintel, 80% of car finance customers arrange their product with a car dealership, while salespeople convert 91% of car finance customers who research products with them into completed contracts.
This is positive news for dealers, but the data highlights the almost unrivalled hold that dealerships have over the distribution of car finance products – a situation that has led to concerns about their sale in the wake of historic mis-selling of PPI by many finance lenders and banks.
In this context, finance expertise in the showroom has never been more important. Undoubtedly, the motor finance industry employs a huge number of highly skilled people providing excellent service to the end customer.
For the public to understand the exact number of sales people and business managers qualified to advise and sell F&I products, however, is very difficult.
In its 2018 annual report, the FCA proposed the creation of a ‘Directory’, cataloguing the status and history of individuals working in financial services. Everyone in the motor retail industry should get behind this proposal, and Alphera has long been a vocal advocate for such a directory.
It would be ideal for recording those who have been through the new F&I Accreditation programme devised by Alphera in partnership with – and managed by – the Institute of the Motor Industry (IMI).
The IMI already has its own publicly-accessible online database of accredited F&I professionals, and the FCA’s proposed new directory would further reinforce a culture of best practice and openness.
Within the motor retail sector, our overall aim is to rebuild consumer confidence and demonstrate to the regulator – in a tangible way – that dealers are actively seeking the best outcomes for their customers.
The IMI register of accredited F&I salespeople is a demonstration of self-regulation in an industry where the regulator is looking for strong leadership and an example for others to follow.
The FCA directory has been proposed with the same principles in mind and could develop into a great initiative for the entire finance industry.
Creating a publicly-accessible register shows that we have nothing to hide as an industry – and that we want to do business in a transparent manner, based on mutual trust and respect between customer and financial advisor. This open approach simply makes good business sense.
Author: Gerry Kouris, marketing manager at Alphera Financial Services