Mortgage Strategy’s first broker census has thrown up some startling results about the way the market is developing. Along with the shockingly high percentage of those polled stating that they didn’t purchase leads, the number of brokers now charging fees is a clear sign that they are looking to shore up their income.
In August 2009 we asked brokers whether they offered a broker fee and the response showed that 57% were charging clients for advice and not solely reliant on the proc fee.
A similar survey in September 2009 by Royal Bank of Scotland Intermediary Partners – now NatWest Intermediary Solutions – had the figure slightly higher at 61%. But our first census has the number of brokers charging fees even higher – at 63%.
The aim of the quarterly census is to see whether there is any gradual change in how the intermediary market is developing.
In terms of a breakdown of the 296 responses we had this time, 43% were appointed representatives and 57% were directly authorised, with 40% working in firms with between one and two people. Some 30% say they are writing three protection cases a month and 43% are writing two or three general insurance cases a month. If this is accurate, all the talk about diversification has clearly hit home. And in terms of annual salaries, some 72% derive an income of between £25,000 and £50,000 per year.
We also asked how confident brokers were about the future – 48% were not confident and a further 15% were very unconfident.
We have yet to find out what the outcome of the Mortgage Market Review will be but if the proposals make it through unopposed, life for borrowers, brokers and lenders could be difficult. With brokers adapting to the changed market it will be fascinating to see the census results into 2011 and beyond.