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Consumers like to have their financial products in one place and brokers could help lenders facilitate this
Brokers can cash in on the trend for cross-selling
It’s the new year and as spring beckons flowers are starting to bloom - in the best buy tables at least. Of course, it’s mainly slush everywhere else.
I have to hand it to Abbey for pulling a 90% LTV deal out of the hat and under 5% too. We may have moaned when it started sending back applications when a single document was missing but clearly the administration cuts have allowed it to compete with the direct market and fund a higher LTV deal.
Currently, first-time buyers lenders. There is a glut of them, many with super credit scores. And they may stick with a lender for life.
I’m inclined to think the lenders offering better rates to borrowers who take cross-sold products have got it right. Sadly, most of these deals are direct-only.
Of course, lenders would have to set up new systems to enable us brokers to sell current accounts now but we did it for Woolwich for years and coped.
If accounts are in one place users can manage their finances as a whole and move money around
Halifax is opening its mortgage deals with attached current accounts to brokers soon.
Another reason this represents an opportunity for brokers can be seen in one of the justifications lenders often claim lies behind direct-only deals.
That is, that the potential to increase revenue from clients with cross-sales allows them to price their mortgage rates lower. So if we brokers do the cross-selling for them it gives them less reason to dual price.
Current accounts are a goldmine as they are such a pain to switch. I have arranged two mortgages for myself in the past three years and will do so again in another three years. But I wouldn’t switch current accounts unless there was a significant incentive.
Being able to buy your first home is incentive enough but a current account client can be the start of a relationship for life.
I would also like to see more evidence of first-time buyer social groups being involved in the design and marketing of products aimed at them.
Being in my, ahem, late 20s - give or take a birthday - I don’t mind admitting that the reason I have my current account, three savings accounts, an old loan and my ISA with the same provider is not an ill-advised disregard for competitive rates but rather that I like to see it all online in the same place. It’s like my financial profile.
Although it is private if all this information is in one place it motivates account users to manage their finances as a whole as well as giving them the freedom to move money around when they wish.
My friends are the same as me. Most of us use our internet social profile pages regularly and indeed spend a lot of time on them.
So if lenders want the next generation of mortgage holders to have more than a single product with them they must ensure their online banking facilities are central to their marketing efforts.
KATIE TUCKER
TECHNICAL MANAGER
MORTGAGE FORCE
