Brokers offer less choice, claims comparison site
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Comparison website moneysupermarket.com has launched a blistering attack on the mortgage broker community by claiming advisers offer limited choice as 90% of deals are available direct only.
The website says lenders are offering better deals and the days of brokers offering a whole of market range of products are gone.
Kevin Mountford, head of banking at moneysupermarket.com, says: “The lack of supply and high demand means lenders can take full advantage of the current situation rather than having to push their products through brokers, which they previously relied on.
“As a result, anyone using a mortgage broker needs to be aware that the range of products available may be limited.”
He adds that intermediaries should be seen as part of the shopping around process rather than the final word in mortgage products.
Council of Mortgage Lenders’ data shows that 71% of first-time buyers used intermediaries to get a mortgage in Q1 2010, compared to 67% in 2006.
Intermediaries also accounted for 57% of the volume and value of deals in the home mover market and 61% of the volume and 64% of the value of remortgage deals.
Dev Malle, group sales director at Personal Touch FS, says moneysupermarket.com are, “talking a load of old tosh”.
He says: “The consumer will vote with their feet. Clearly what the consumer values is telephone or face-to-face advice to help them tackle what is still a maze of thousands of products. What is required is a complete understanding.
“No one has yet found a solution to replace intermediaries, either through the internet or direct products.”
HSBC, who has never offered deals via intermediaries, is backing Moneyfacts analysis that 93% of the lowest deals are direct-only.
The research surveyed 96 of the lowest rate deals over the last two years and found only six were available to mortgage brokers.
It says the difference between the best broker and best direct deals is 0.31%.
Martijn van der Heidjen, head of mortgages at HSBC, says customers can no longer rely on brokers to get them the best deal.
He adds: “Going to a broker can be a useful part of this process, but as this research clearly shows it definitely shouldn’t be seen as the route to guaranteeing you the best deal. Borrowers need to check newspaper best buy tables, comparison sites and lenders directly.”
Mortgage Strategy is fighting for the future of mortgage brokers with a campaign and petition to be presented to the Financial Services Authority and the Treasury.
The petition has been signed by 815 people and is open until August 31.
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Readers' comments (37)
Anonymous | 2 Aug 2010 10:35 am
Another kick in the teeth for brokers.
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Anonymous | 2 Aug 2010 10:36 am
I have never put on comment on before but this made my blood boil - perhaps some brokers use a version of a sourcing system that shows direct products or more importantly that cheap direct deals often have such tight criteria's 95% of my clients cant get them anyway and not because they are adverse or self cert !
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Anonymous | 2 Aug 2010 10:40 am
Of course banks want customers to come direct, that way they can trip them up with hidden fees and tie in clauses. Only an independent professional adviser can explain honestly the ins and outs of lending without being biased.
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Anonymous | 2 Aug 2010 10:41 am
This company clearly forgets that it made it's name as a packager / distributer of mortgages. They've gone on to better times and it's a shame they choose to attack the industry they once were supposed to support.
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John Baker | 2 Aug 2010 10:43 am
Does this mean their lead sales are down? After all, when they were selling shed loads of leads a few years ago this wouldn't have been released. Perhaps if their quality and refund policy wasn't as woeful as it is, they might be making money from the leads. I haven't used them for several years purely because of this.
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C. Macdonald | 2 Aug 2010 10:44 am
People come to brokers for advice and not just this comparison site. The lending criterias for lenders is a nightmare now and the one thing comparison sites do not do is give advice. This is just moneysupermarket.com touting for business and trying to put people off the broker market. I am whole of market and I also use my system to look at direct deals and I do tell my clients about them, because that is what a good whole of market broker should do. Panel brokers may find it harder, but, still they offer advice and discussion, which is what most clients want.
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Anonymous | 2 Aug 2010 10:45 am
The reason people use brokers is that not only are they getting the best advice and recommendation on the thousands of potential products available, but also getting advice on fully protecting their mortgage to ensure they can stay in their new property - something Moneysupermarket et al do not do! There is more to mortgages than just mortgages.....
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Alan J Nadin | 2 Aug 2010 10:53 am
I truly hope that the usual apathy does not apply to responding to this petition. Brokers, IFA's, business owners and Networks all need to sign the petition and encourage trade bodies to respond too, which I am sure they already are. It is clear that the comparison sites and a number of lenders believe they can finally squeeze us out. Terrible information and no advice.....clearly not a freat choice, save for those who really don't wish to take any, it is not for all!
It will be too late to moan if the community does not act together, regardless of how big or good you think you are, it is all of our futures.
Brokers and IFA's still do offer the last word in advice and choice, particularly taking into account some of the instances reported concerning the low quality of Bank Advice from many clients and a total lack of understanding of anything that is not extremely straightforward.
It clearly isnt the broker community's fault that only a small percentage of the very lowest deals are not through us, particularly when the lenders orchestrate that anyway!! Clearly the stats on volumes and who from show that consumers deserve better choice through brokers as they trust us the most!!!
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Greg Oxenham - MORTGAGE ID | 2 Aug 2010 10:55 am
The day the FSA wades into this argument and declares that consumer interests are better served by comparison websites is the day I close my company and move into a non regulated financial services role.
It is beyond comprehension that the FSA has not come out and made a clear statement of intent over this matter. There is no better single tool to inform the mortgage buying public than whole of market specialist mortgage advisers.
Comparisaon websites have a an entrenched position to defend and that position is entirely dependent upon them selling advertising around the information they dispense. Their information may also advise but it is does not recommend. Consumers have been clearly proven to need clear recommendations. If we as an industry continue to allow these self serving organisations to distort the facts and not insist that the FSA intervene to regulate the comparison sites we deserve much of what we get.
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John Toogood | 2 Aug 2010 10:55 am
The 90% of deals that are available direct from lender are presumably included on moneysupermarket.com comparison site. If this is the case, I assume moneysupermarket receive a fee from the lender if the client is introduced via their site. Why will the lender therefore not allow a broker to introduce the case to them for a nominal fee(same as moneysupermarket)and at least they would have the confidence that the client was receiving FSA approved advice rather than no advice at all?!?!
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