John Rice: The best packagers provide great value for brokers in terms of the services they offer, including access to a multitude of lenders under one roof, inhouse underwriting and online processing facilities, plus efficient and cost-effective legal and survey services.
Moreover, the packaging community includes some of the most experienced practitioners in the market. They offer brokers support and products that suit their customers’ financial circumstances exactly.
But the liquidity crisis has brought home to brokers the importance of constantly checking that their packagers are able to meet not only the normal service standards that we expect but also their financial obligations in the form of proc fees.
The onus is on brokers to review the relationships they have with lenders and packagers, ensuring they do their own due diligence to ascertain firms’ service standards and financial stability.
Many brokers may decide they prefer dealing with packagers that can demonstrate a sufficient range of products and services while maintaining sound finances.
By definition, these packagers might be the larger, better known brands whose size and standing in the marketplace provide the kind of comfort that brokers need in these difficult times.
Perhaps it’s time that brokers remember they are packagers’ customers and act accordingly. It’s unlikely any of us would invest our own money in the shares of any company without having made some effort to look at how the business was run first.
As customers, brokers should be asking their packagers searching questions. If they don’t get the right answers they should consider taking their business elsewhere.
Mark Holland: We’ve seen many packagers fall by the wayside in recent months as a result of turbulent market conditions.
Consequently, many of us have lost proc fees and are having to explain delayed cases to customers. This raises the question of whether packagers offer value for money, let alone quality assurance.
Before writing this column I considered the benefits of using packagers, the pitfalls and the reasons why we refer business to them with a 50/50 split on fees.
I recalled the number of times packagers have let me or my team down and how I’m frequently confronted with the dilemma of which firms to place deals with if I want to be secure in the knowledge that they’ll offer a decent service.
Following my deliberations, I can only think of two reasons why brokers use packagers – free benefits packages or better headline rates.
Long gone are the days when I could place deals with a packager and get value for money, receive regular updates, feedback and assistance with any cases that appeared to be problematic.
No longer can I speak to case handlers who want to help me in a way that will assist and make life easier for me and my clients.
When we send mortgage application forms to our clients, we prepare them and ensure they are fully packaged before sending them to packagers.
In this light, we should ask ourselves why we use them in the first place.
The time-saving argument raises the question of whether brokers have become too lazy to give their clients personalised, thorough services. So let’s get back to the traditional approach to broking business and cut out the middle man from our work.