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ARs of just 3 major networks can call themselves ‘independent’ post-MCD


Swathes of brokers will be unable to describe themselves as ‘independent’ from next month as major networks look to stop their intermediaries from advising on second charge loans.

Research by Mortgage Strategy shows just three major networks will allow their brokers to advise on second charge loans and thereby maintain their independent status.

As part of the MCD, which comes into effect on 21 March, the second charge market will become regulated.

The rules state that where a client wishes to increase borrowing, they must be made aware that a second charge loan could be more appropriate than a remortgage or further advance.

Brokers do not need to advise on second charge loans, but if they choose not to then they cannot call themselves ‘independent’ verbally, in their firm name or in any promotional material.

Earlier this week, Mortgage Strategy revealed that Sesame members must refer second charge business to its master brokers. However, it said it is considering an alternative solution for firms with ‘independent’ in their names.

Sesame Bankhall Group sales director Mark Graves says: “We are also working closely with a small number of firms with independence in their business name to look at all available solutions. Over the coming months we will be carefully monitoring market developments to assess the impact of the MCD and consider our options going forward. We will ensure that our approach continues to evolve in line with the needs of our members and their customers.”

Tenet Lime says it is giving members a choice of whether to advise on seconds or not.

Managing director Gemma Harle says: “We allow firms to make their own decision and are equally happy to accommodate both independent and restricted propositions; providing clear guidance on support on all options.”

Personal Touch Financial Services will allow its brokers to advise on second charge loans.

PTFS sales and marketing David Carrington says: “The reason for doing this is if you are a customer you don’t want to be passed from one person to the next.”

A note from Intrinsic to its members shows its restricted advisers will refer cases to one of its master broker partners. Independent advisers can remain independent and give advice although they must research products, obtain a KFI or ESIS and package cases using a master broker.

Openwork members will not be allowed to advise on second charge loans and must pass them onto the network’s exclusive partner, Enterprise Finance.

Openwork mortgage and protection proposition director Paul Shearman says: “We only have a couple of firms that describe themselves as ‘independent’ and therefore the impact of the changes on the network are very limited.”

Stonebridge, like Sesame, insists its brokers must refer the case to its panel of master brokers.

Pink and First Complete, part of the LSL Group, will insist that their brokers pass second charge cases onto their panel of master brokers.

LSL director of mortgage services David Copland says: “Our view is, with feedback from the brokers, is that they don’t advise for second charges and there is not much appetite out there to advise on second charges.”

Mortgage Intelligence could not be reached at the time of publication.



Sesame forces members to drop ‘independent’ tag post-MCD

Members of Sesame network will no longer be able to call themselves ‘independent’ from next month. As part of the MCD, which comes into effect on 21 March, the second charge market will become regulated. For firms to be described as independent from that date, they must advise on both first and second charge loans. […]

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  • James Mather 1st March 2016 at 1:34 pm

    All this commentary appears to be with regard to new second charges. I haven’t read the MCD in detail as I don’t get involved with mortgages, but surely, if the client actually has a second charge then it would mean that the broker is unable to advise on a new first charge remortgage if it removes the second charge

  • Stuart Duncan 26th February 2016 at 2:19 pm

    I shouldn’t laugh, but the ad halfway down the article providing the phone number for Mind (no one should have to face a mental health problem alone) seems to be particularly well-placed in the circumstances!

  • Derek Frost 26th February 2016 at 12:01 pm

    Indeed, many Advisors have no appetite for 2nd.Charge Loans, but client circumstances change & enquiries or necessary advice will require that they cater for them.
    Referring to a panel or obtaining own research solutions require ‘Permission’ in order to remain “Independent” or “Whole of Market”, as confirmed to me yesterday by ‘FCA’: “Provided that a firm responded ‘Yes’ on the ‘MCD Data Collection’ form @ ‘Connect’, answering yes to 2nd.Charge advice, they’re allowed to describe the firm as both ‘Independent’ & ‘Whole of Market'”

  • Helen Cooke 26th February 2016 at 11:58 am

    I’m not sure this article or headline is accurate. There are other networks that haven’t been included in this survey!

    • Paul Thomas 26th February 2016 at 12:17 pm

      Hi Helen,
      We do say that we have approached just the major (top 10) networks.