Society warned on retention

Nationwide has come under fire for not offering an HBOS-style retention policy and been warned it could lose clients as a result.

The society’s executive director Stuart Bernau recently attacked HBOS’ retention scheme for being an ineffective policy.

But Graham Kennedy, partner at Graham Kennedy Mortgages, disagrees with Bernau’s criticism and warns that the society could be missing out on retention business by not offering a similar proc fee-based scheme.

He says: “While not all HBOS retention products have worked, some are competitive enough in rates and arrangement fees to recommend to clients. In fact, some compare fav-ourably with some of the retention products offered by Nationwide.”

Kennedy also praises the HBOS proc fee scheme as a “great initiative” and believes more lenders will jump on the retention bandwagon as they begin to see the benefits of paying brokers for retention.

A spokeswoman for Nationwide says: “We have not ruled out introducing a proc fee-based retention policy and are always monitoring the market.

“We don’t think a retention policy is enough for brokers to keep their clients with Nationwide and the competitiveness of our products speaks for itself.”

A spokesman for HBOS says: “Our move has been popular and in terms of whether it has worked or not, we are comfortable with our performance.

“Our strategy is about more than simply offering proc fees to intermediaries – it is also about offering the best possible value to new and existing customers.”