There are few things as frustrating, in any line of business, as not getting paid on time — apart from not getting paid at all, which brings with it a whole new series of headaches.
However, waiting for that money to hit your bank account is probably up there in terms of generating stress in the workplace.
For mortgage advisers, there can be an entirely different level of frustration based on the procuration fee ‘system’ and the differing ways that lenders/networks/clubs facilitate those payments.
To give most lenders credit, there is an understanding that keeping advisers waiting weeks on end for payment is not conducive to good ongoing relationships or to repeat business — we are not a market without competition and advisers will be able to make a discernible choice of lender, all other things being equal.
The powers of persuasion
There have recently been calls from some brokers for networks and clubs to do more to help speed up payments and I believe there is some merit in putting more pressure on lenders to do this.
Much is made of the technological advances that lenders are making, particularly in relation to their product transfer systems and the way they engage with existing borrowers. So I fully understand why brokers might think some of that ‘tech spend’ might be siphoned off into securing quicker proc fee payments to them.
There is no reason why lenders can’t pay procuration fees promptly, and by this I mean within a modest number of days of completion. To have to wait until the middle of the next month is far too long.
This is a marketplace that thrives on competition and we are doing all we can to persuade lenders to pay earlier and more frequently because there will be a clear competitive advantage to do so. This will take time. We should not anticipate that all lenders will start paying on exchange during 2018, but again, I see no reason why brokers should have to wait weeks to get paid.
In the meantime, we can pay competitive rates, deliver daily payment runs, offer a 24-hour turnaround promise and automatic payments and statements — and persuade lenders who are not keeping up with their peer group when it comes to payments to change their ways.
Bob Hunt is chief executive of Paradigm Mortgage Services