We're getting nowhere fast with FSA dual pricing talks, says AMI
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The Association of Mortgage Intermediaries says it has hit a brick wall in its discussions with the Financial Services Authority with regard to dual pricing.
Robert Sinclair, director of AMI, says the trade body has been holding talks with lenders and the regulator about what can be done to help brokers.
But he says: “I have asked the FSA to address the issue but it has indicated that brokers are only required to offer the deals that are available to them.
“We regularly discuss the difficult position this puts brokers in but the regulator does not appear to be minded to do more than it has already done. We will continue to apply pressure in this area.”
Sinclair says AMI is also talking to politicians, the Treasury and the Bank of England about increasing the amount of mortgage funding available and trying to find ways of getting lenders such as Northern Rock back into the market.
He partially blames the problem of dual pricing on lenders such as HSBC pricing other providers out of the market.
He says: “Some lenders are being effectively forced to price products more cheaply in their branches by the actions of HSBC, which does not have an intermediary offering.
“This is not the choice of banks that deal with brokers but they have large branch networks with staff they need to keep busy.”
He adds that banks have tough branch targets and are trying hard to meet these, while they are able to meet broker targets, even when pricing deals much higher.
Tim Robinson, mortgage manager at IFA Pearson Jones, says direct deals are not always as good as they look.
He says: “What we as advisers have to explain to clients is that some of these direct offerings come with strings attached. For example, certain products are only available if customers are prepared to open current accounts with the lenders concerned, which will cost them monthly administration fees.
“And some direct-only products are like a sprat to catch a mackerel. Lenders really want clients’ daily banking arrangements on which they can charge ongoing fees.”
He adds: “If they have to initially reduce the margins on their mortgage deals for the initial period to get this business, so be it.”
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