Abbey for Intermediaries is to link its proc fees to quality of business, meaning networks will be paid a blanket fee based on the overall quality of their brokers’ business.
From July 2, the quality of brokers’ business will be taken into account when assessing proc fees for its core residential range. Some fees for its key accounts, which make up 98% of its business, will increase, while others will go down.
The proc fee for key accounts will vary between 0.35% and 0.40%, with the quality of brokers’ business now determining part of that.
It is believed key accounts with good-quality business will be paid up to 0.40%, mediocre business 0.37% and poor-quality 0.35%.
For directly authorised intermediaries who transact through mortgage clubs, gross proc fee terms will be 0.33% for core residential cases, while for appointed representatives of networks who are not part of its key account set, the proc fee will also be 0.33%.
It is understood the lender will judge what proc fee its key accounts receive against key metrics, such as packaging of cases, the conversion rate of applications to offer and the overall quality of cases.
Jon Round, group financial services director at LSL Property Services, says networks should already be focused on making sure every broker submits high-quality business, so one set fee for networks should not cause concern.
He says: “There is always a slight difference between how different advisers perform, that’s not new. Networks should always be working with advisers to improve standards, whatever level they are at.
“It is slightly daft if anyone has been taking on poor-quality advisers and thinks that a proc fee is the main reason they need to change this.”
A spokeswoman for Abbey says that the changes are in line with recent competitor changes in this area.