Love them or loathe them, direct-only deals appear to be here to stay and, according to my research, account for an increasing proportion of mortgage offerings, particularly on higher-LTV deals.
Rewind just a few years and they were far less prevalent; like most brokers, I tended to ignore them. But when borrowers started sourcing better rates than I could after a few minutes on the internet, something had to be done.
We switched to an alternative sourcing system that offered a true whole-of-market research facility and rolled out our first structured fee-charging model, explaining to clients we would consider all options on their behalf even if this meant steering them in the direction of a lender that we could not deal with.
Many of our brokers struggled with this concept as they sometimes lost control of the client as the lender attempted to cross-sell protection and general insurance products that we typically tried to retain to offer the client a “best of both worlds” package.
Fast-forward to 2014 and all our advisers have grasped the whole-of-market concept and all charge fees. We lose the odd client to a direct lender but in all cases the client acknowledges that we have given them the best possible advice. And we get more referrals as a result.
Many come back after a week or so, having either received a “computer says no” decision or been told they cannot get an appointment for four weeks (thanks, MMR). If you are in this market for the long term, this approach will reap dividends.