Star letter: New outlet for brokers
Halifax’s announcement last month that it had reverted to paying a full procuration fee for all product transfers was welcome news. Any increase in fees paid to the intermediary market is a positive thing but its introduction at this time may also be viewed as a tactical manoeuvre to ensure Halifax keeps its place as the leading player in this sector.
At present, only Halifax, BM Solutions and Woolwich offer the full product transfer solution to the intermediary market, including payment of a fee. Santander says it hopes to offer a solution this year and it will be interesting to see its next step.
The bigger question is who will be next into this market and when. With the introduction of a fully advised sales process for all mortgage sales post-MMR, it was always envisaged that lenders would have to look at their advice models.
We have already seen changes to how lenders interact with the consumer via their branch networks, with some actually pulling away from offering a mortgage service. The same thought process and decision-making will have to be undertaken when a customer comes to the end of their existing product. Historically, this has been carried out via a non-advised model covered by a small number of staff. As this is no longer a viable option, lenders will have to decide whether to staff those departments to offer an advised model or outsource the process to the intermediary market.
The key aspect, apart from the cost, is that product maturities are not spread equally across the year; there are some very large peaks and troughs. These tranche vagaries are easily managed within the intermediary market but will offer more challenges for a lender internally.
The outcome, I believe, is that over the next 18 months more lenders will enter this space, IT permitting. This will create yet another new market for intermediaries to fully show the value they bring to the advice process.
Martin Reynolds, chief executive, SimplyBiz Mortgages
Automation means lack of accuracy
If more lenders start using automated valuations, as Mortgage Strategy reported last week, it will become a big priority for customers to get their own valuation or upgrade to a survey. It is amazing what some inexperienced buyers miss when they view a property.
I have to liken the lenders to the Wild West gunfighters of the past who also sacrificed accuracy for speed and paid a very heavy price.
Around the world at our expense
Words fail me after reading about how much the FCA directors are claiming in expenses.
I could not help noticing the line: “This covered a two-night stay in New York, a one-night stay in Paris via the Eurostar and a round trip to Hong Kong and Sydney, staying two nights in Hong Kong and one night in Sydney.”
Private companies now tend to use conference calls/video conferencing to save on expensive travel costs (certainly the ones I have worked for in the past few years). However, these people do not need to worry about that as someone else is picking up the tab. So the thinking seems to be: “Let’s have a good old jolly on a round-the-world trip.”
FCA trips are jolly well unacceptable
Travel and accommodation are no doubt part of the job but one could ask the FCA directors: “Is your journey really necessary?”
I can understand trips to Europe but what relevance do Hong Kong or Australia have to UK and EU regulation? If you want an indication of their processes, a teleconference or plain reading may suffice. This sort of travel looks suspiciously like a jolly to me.
Key Group’s move opens more doors
I read in Mortgage Strategy that Key Group is to move into secured loans after acquiring packager V Loans.
This is a very interesting move which rapidly broadens Key’s offering with an established and respected brand in the secured market. I wish co-founders of V Loans David Pinnington and Marie Grundy every success.