View more on these topics

Leader: ‘Pay for what you get’


Proc fees have become one of the most talked-about areas of the mortgage market over the past year, particularly since the MMR was introduced in April.

It soon became apparent after the new rules were introduced that the amount of work brokers had to put into each case had risen significantly.

This, in turn, led senior figures within the industry to call for proc fees to increase across the market. 

Some lenders have responded to those calls, although many of them are merely falling in line with their competitors.

While the calls for increased commission have come from many within the broker market, nobody has specified by how much – until now.

L&G says the average proc fee paid by lenders is around 0.4 per cent. So it may surprise many that senior figures within distribution are calling for the average fee to rise to 0.7 per cent.

The old argument goes that brokers should be charging fees, and, of course, that is a sound business strategy. But it must be remembered that lenders are relying more heavily on the broker sector now and therefore it is only right that they pay a fair fee to acquire business.

And in a new world where quality is king, the old cliché of “You get what you pay for” seems apt.

Pink director Mark Graves has put forward one of the more interesting solutions in recent times. He has suggested lenders should sign up to an industry charter whereby they all agree to pay the same fee.

While this is unlikely to come to fruition, it is certainly a valuable contribution to the ongoing debate – a debate that will likely run for some time.



Letters: Haughty lenders are bad for business relationships

Star letter: Haughty lenders in their ivory towers are bad for business relationships I am increasingly concerned by the over-defensive and often haughty attitude displayed by many lenders. There is an air of superiority and sometimes disdain that is simply not conducive to building solid and profitable business relationships. The mortgage industry relies on trust and […]

Call for evidence on retrospective regulation ‘produces no examples’

The FCA says a call for evidence on retrospective regulation has produced no genuine examples of where it has applied its rules retrospectively. In August the regulator asked firms to send it examples of retrospective regulation. It defines this as the application of “a more demanding standard or interpretation of the rules after the event, with […]


Mark Hoban set to quit politics

Former Treasury financial secretary Mark Hoban is to stand down from Parliament after 14 years at May’s general election. The Conservative MP for Fareham caused controversy in his time at the Treasury after saying financial advisers were no more qualified than staff at McDonalds. In a letter to Tom Fyfe, the chairman of Fareham Conservatives, Hoban […]


News and expert analysis straight to your inbox

Sign up