Brokers and large distributors have united behind Countrywide financial services director Nigel Stockton’s call for lenders to increase procuration fees.
Last week Mortgage Strategy revealed Lloyds Banking Group has decided to follow in Santander’s footsteps by linking proc fees to the quality of business submitted from the start of next year.
Last week, as the news broke, Stockton called for “fair recompense” as a result in improving professionalism and increasing workloads for brokers.
Under the MMR, responsibility for ensuring affordability lies ultimately with the lender. But brokers say they are the ones having to meet tougher packaging requirements being introduced by lenders ahead of the MMR, and as such should be rewarded accordingly.
Perception Finance managing director David Sheppard says: “Lenders now require a lot more from brokers in terms of the affordability checks and necessary documentation. I think this is a healthy move for the market, but at the same time if the lenders are wanting us to do so much more in terms of pre-vetting the clients, it is only right we are compensated accordingly.”
SimplyBiz Mortgage Club chief executive Martin Reynolds says: “It would be an interesting debate with lenders in the run-up to and post-implementation of MMR to understand what additional work and checks they would want an adviser to do above what they currently are doing. If there is additional work, surely that therefore warrants a renegotiation of fee structures?”
However, PMS executive chairman John Malone is calling for more equality in the fees directly authorised and appointed representatives are paid.
He says: “The intermediary, regardless of whether they are directly authorised or an appointed representative, are largely doing the same job and should therefore be paid the same money.”