Golden opportunity to sell better MPPI

14 June 2010

High street banks are about to lose an important source of income after regulators insisted they would press ahead with restrictions on the sale of payment protection insurance.

This is great news for intermediaries. The ruling by the Competition Commission means banks will no longer be able to sell PPI to customers at the time they borrow, or during a fixed period - possibly 14 days - thereafter.

The CC says most borrowers have no idea PPI is widely available from providers other than their lenders so they rarely shop around for better deals.

According to the Council of Mortgage Lenders and the Financial Services Authority brokers increased their market share by 2% in Q1 2010, accounting for 62% of all mortgages written.

But around 75% of all mortgage payment protection insurance products are sold by lenders. This means your clients are either walking into the branches of lenders you have placed them with or are being approached soon after completion.

Either way, brokers are losing out on a huge source of income by not selling products that are in demand by clients when they have the opportunity to do so.

With an average commission of around £110 per case it only takes a couple of cases a week to generate a four-figure income stream that is renewable.

Clients go to brokers to get the best mortgage so why not take advantage of this ruling and offer them the best MPPI deals too?

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