Sally Laker is managing director of Mortgage Intellingence
We are more than happy for our brokers to describe themselves as independent if they wish. Many are keen to do so and we have no desire to interfere unnecessarily with the day to day running of their firms.
About a year ago we asked potential members what they thought would be important in the future. They told us: a) they wanted to continue to use the independent label and b) they wanted value for money from their network.
Things have moved on since then and cost has become more of a concern but these two issues are still close to brokers' hearts. Up to now mortgage brokers have been proud to call themselves independent. It is a key part of the sale because it provides comfort to the customer. We are therefore keen to ensure that our ARs are able to continue to call themselves independent. They will be able to offer a panel of 64 lenders that is representative of the whole of market and also offer the client a choice of receiving their fee via proc fees or fee-based advice.
This decision will be made at the beginning of the sale rather than after completion, so provided it is made clear to us from the beginning we can make the arrangements.
The whole proc fee will have to be rebated including the network portion but the fee charged will then become the brokers' fee income and we will apply our compliance charge to that rather than the proc fee.
It is our opinion that as a principal we are there to support brokers and provide the compliant sales process to ensure that they can sleep at night, not to interfere with the way they run their businesses.
In future we may see a change in attitude to fee-based advice. Brokers may feel that as they are giving and documenting their advice on which mortgage to take, they are justified in charging a fee.
Shaun Godfrey is group sales director of bankhall
We does not want to interfere with how our members do business, as long as they offer clients the options of being charged a fee or for the broker to take commission.
The use of the word independent is important to clients and brokers. It's more than simply an emotional thing, as was suggested by one commentator in Mortgage Strategy recently, it is a key selling proposition. A consequence of brokers being advised by networks to drop the independent tag is that they may find it harder to attract new clients.
But some networks are advising their firms to drop the word which suggests one of two things. Either they didn't understand depolarisation (in which case I would ask why) or they did and have obtained members under false pretences. I'm sure members felt they were joining a firm that would help them stay independent.
Recent research by Which? found that some advisers at high street bank-owned firms did not make it clear that they can only recommend their own companies' mortgages. This is an important issue with regard to independence, perhaps more so than network members who generally have access to mortgage panels of fifty plus lenders representing whole of market.
Some commentators argue that the industry is faced with a lack of public confidence with regard to commission payments and that most clients do not want to pay an upfront fee to the adviser. But a recent survey shows that most people are prepared to pay IFAs a fee so one can assume that this applies to brokers too.
It is up to ARs to run their businesses. For networks to interfere only proves that to being AR is not an easy place to live because the landlord keeps telling you what to do. One answer is to be directly regulated and use support services. Then you can truly say you are captain of your own ship.