View more on these topics

Brokers offer less choice, claims comparison site

Comparison website moneysupermarket.com has launched a blistering attack on the mortgage broker community by claiming advisers offer limited choice as 90% of deals are available direct only.

The website says lenders are offering better deals and the days of brokers offering a whole of market range of products are gone.

Kevin Mountford, head of banking at moneysupermarket.com, says: “The lack of supply and high demand means lenders can take full advantage of the current situation rather than having to push their products through brokers, which they previously relied on.

“As a result, anyone using a mortgage broker needs to be aware that the range of products available may be limited.”

He adds that intermediaries should be seen as part of the shopping around process rather than the final word in mortgage products.

Council of Mortgage Lenders’ data shows that 71% of first-time buyers used intermediaries to get a mortgage in Q1 2010, compared to 67% in 2006.

Intermediaries also accounted for 57% of the volume and value of deals in the home mover market and 61% of the volume and 64% of the value of remortgage deals.

Dev Malle, group sales director at Personal Touch FS, says moneysupermarket.com are, “talking a load of old tosh”.

He says: “The consumer will vote with their feet. Clearly what the consumer values is telephone or face-to-face advice to help them tackle what is still a maze of thousands of products. What is required is a complete understanding.

“No one has yet found a solution to replace intermediaries, either through the internet or direct products.”

HSBC, who has never offered deals via intermediaries, is backing Moneyfacts analysis that 93% of the lowest deals are direct-only.

The research surveyed 96 of the lowest rate deals over the last two years and found only six were available to mortgage brokers.

It says the difference between the best broker and best direct deals is 0.31%.

Martijn van der Heidjen, head of mortgages at HSBC, says customers can no longer rely on brokers to get them the best deal.

He adds: “Going to a broker can be a useful part of this process, but as this research clearly shows it definitely shouldn’t be seen as the route to guaranteeing you the best deal. Borrowers need to check newspaper best buy tables, comparison sites and lenders directly.”

Mortgage Strategy is fighting for the future of mortgage brokers with a campaign and petition to be presented to the Financial Services Authority and the Treasury.

The petition has been signed by 815 people and is open until August 31.

Recommended

Never mind advice and deals, sample the doggy biscuits

With regard to the fanfare that followed the launch of Metro Bank last week, I’m sorry to be sceptical but I wonder if UK consumers are gullible enough to not worry about getting the best advice and deals that are available to them. Will they simply be blinded by Sunday opening and the free doggy […]

1

HSBC increases mortgage lending by 3%

HSBC has doubled its profits and reported pre-tax profits of $11.1bn (£7bn) for the first six months of 2010, but its total mortgage lending in the UK has only risen by 3% from December 31 2009 to $96bn (£60bn).

31

PTFS axes Paaleads from its lead generation panel

Personal Touch Financial Services has axed the Moneysupermarket.com owned Paaleads from its lead generation panel in the wake of its parent group’s negative comments about consumers using brokers to access the best mortgage deals.

Newsletter

News and expert analysis straight to your inbox

Sign up
Comments
  • Post a comment
  • James Hall 11th November 2010 at 10:25 am

    Blimey, we do all get in a state dont we!!

    Commission disclosure – death of the industry!!!

    Mortgage Regulation – death of the industry!!!

    Comparison sites and direct deals – death of the industry!!!

    The reality is that business is tough for everybody at the moment and everyone is fighting hard to get there share but how many consumers actually take any notice of any of this.

    Regulatory cost, the economy and lack of supply are the biggest risk to the broker community that, in general, dont have very deep pockets and whose cashflow is not great. Everyone needs to stop focusing purely on price. In my experience, most people use a broker because it makes there life easier and they trust the person to help them, not because of the cost and the belief that they will get the deal that is £100 cheaper over the first 5 years. If you are trying to attract customers, focus on what your service gives the client not on I can look at the whole market blah blah blah. If the client trusts you, wants to deal with you, understands what you will do for them in terms of the overall house buying/remortgage process they can see why you are different to a comparison site, a bank adviser etc. If you focus on I will check the whole of the market and get you the best deal you cannot win because the big brands have got far deeper pockets to get the message out to general public that they can get the client cheapest!!

  • markvictor111 9th November 2010 at 4:48 pm

    • This is a wonderful opinion. The things mentioned are unanimous and needs to be appreciated by everyone.
    **********

    markvictor111

    Mortgage Broker

  • PDC 15th October 2010 at 11:04 pm

    People need to seek independent advice and not rely on comparison sites, lets see how the banks swing when every single person advising on mortgages needs to be directly approved by the FSA…………..i believe lenders will change the method of thinking and revert back to the broker market to supply their mortgage business.

  • Ashley Clark 3rd August 2010 at 8:47 am

    Is Moneysupermarket.com struggling on this outburst? The company behind Mortgage 2000 platform pulls it with little notice, they branch out into FREE Vouchers – GREAT ORDER ME A PIZZA and then they lash out at the hand that fed them for many years ….. and yes clients that use their comparison site have ZERO protection and do they really offer all products – my understanding is that both Direct Line and AVIVA direct make a huge play on they are not on comparison sites. The FSA really needs to step up to the plate and monitor not just non-advised comparison sites but also financial newspapers, magazines and TV programs who again sometimes do more damage than good. Yes … lets all rush off and buy a house in the sun only to have it repossessed because some bloke on TV sold me the dream. Advisers and Brokers need to work rogether as mentioned in an earlier comment – contact me at http://www.advisersunited.com to view a campaign to make FSA accountable for their failure and for ideas on how we can all work together!!

  • Matthew Platt 3rd August 2010 at 8:41 am

    Bye Bye moneysupermarket.com.

    Mountford presses the self destruct button and almost instantaneously thousands of brokers switch off their supply of their horrendously poor quality “leads” never to be switched back on.

    Never mind Kevin, I’m sure HSBC will be willing to buy them from you, and then I’m sure the clients will be able to get an appointment with an HSBC branch adviser in time to proceed with a mortgage application on their dreqam home, and then I’m sure that th clients will pass HSBC’s underwriting criteria and all will be fine.

    But wait, ………………………….. what happens if they don’t??????????????

  • Chris Lees 2nd August 2010 at 7:32 pm

    Who is Kevin Mountford? From this I know what he purports to be but in reality who is he? Apparently an uneducated and ill informed individual whose only real competency in his job is marketing through misleading the public and misunderstanding the UK financial industry. The vast majority of brokers such as myself and who I know have had to adapt to a new financial environment and now offer an advice service to clients which includes sign posting to and assisting with the accessing of direct only deals as part of an ALL ROUND service. They do not work for a website whose primary income comes from online click through advertising direct to lenders. Unfortunately the majority of consumers may be taken in by his comments but I hope that they see this for what it actually is, ‘a load of old tosh’ which is biased towards the feathering of moneysupermarket.coms own nest. Mountford should be ashamed of his words but he should also be embarrassed by his public show of a lack of understanding of a part of the UK financial industry which has been around alot longer than he or moneysupermarket.com have and which has done more to make the UK financial industry one of the most envied in the world. The same industry which he is happy to draw an income from may I add. Be grateful not ignorant Mountford.

  • angela grice 2nd August 2010 at 4:30 pm

    Ken Mountford – HA HA you’re a joke! – hilarious – talk about biting the hand that feeds you! Not to mention the number of HSBC customers who have come to me after being told from the local branch of HSBC ‘NO INSURANCES – NO MORTGAGE!’ and then when hit with the price of their insurance have taken a sharp exit to the nearest broker

  • Tom Cleary 2nd August 2010 at 3:54 pm

    Without being alarmist, I do honestly believe that we are the last generation of Mortgage Brokers. The market will come back to us eventually but can anyone really see our children being able to source their mortgage via an intermediary. I feel sad after twenty years as a Broker but I think it will inevitably go that way. Not yet though, we still have quite a few years yet…

  • Jinta Kunta 2nd August 2010 at 2:12 pm

    As the guy moneysupermarket.com says that the Brokers should be “used” to gauge the temperature of the product, he should also add, “Moneysupermarket.com should be used as a comparation purposes and customers should go direct for a better deal! HSBC guy says that Brokers do not offer better deals and it is true to say that some of the HSBC deals are god but it is all those add ons! I met someone who was offered a good deal with HSBC but was truly fleeced with expensive life and critical illness policies which were a lot cheaper elsewhere. Comparision sites and the Banks are like chameleons, changing colour to suit the ocassion but the Brokers are lifelong partners!

  • Jonathan Burridge 2nd August 2010 at 1:11 pm

    Its very easy to show dissatification with this message – stop buying leads through PAA.

    Moneysupermarket’s statement shows a true lack of understand, very few borrowers espectially now, have the ability to take their pick of products. Infact even those that do seek advice along the way.

    I say again – simply stop buying leads through their sub company, there are plenty of other suppliers.

  • Ketan Yadav - Avenue & Co Private Finance 2nd August 2010 at 12:13 pm

    ‘9 out of 10 consumers would rather use a broker than try and do it themselves’ should be the follow up headline!

    Moneysupermarket will resort to saying anything to divert more attention to its web comparison site. (oh and I do prefer the meerkats on Compare the Market)

    Many consumers still dont realise that the advertisers have to pay to be on the list of providers and many products wont appear on these best buy tables from many lenders.

    Consumers also need to be aware of the fact that ALL independent brokers now have access to Direct and Direct only deals and good brokers will advise on both – and a good client will appreciate honest, impartial, advicefrom a qualified professional and be prepared to pay a small fee for it.

    There is no doubt that more lenders are distributing direct only and dual pricing and the trend is increasing – but primarily on First Time Buyer rates only – and guess what, our company can offer you both – yes, its true!

    These direct only lenders will have to compete soleley on price and rates to get on the best buy tables. This price competition will erode profit margins but increased price competition with other lenders is ALWAYS good for the consumer as more lenders cut fees and rates to stay competitive.

    With all the negative press from Which? Whistleblowers who worked in banks and left, and the FSA regarding poor high street lender advice,(who incidentally were the highest sellers and culprits of mis-selling of endowments, PPI, and other high commission paying, poor value products), is it any wonder that people prefer to use independent advisers? –
    Just look at the sales targets of these tied advisers!

    …is it time to shut up shop? – Maybe not just yet – we are seeing increasing levels of enquiries and more exclusive products from lenders now, than at any time in the last 2 yrs. Why? because not everyone will qualify for an HSBC loan of 3.5 x income with no consideration of bonus payments …and thats why brokers are still in business.

    Many lenders have reverted back to brokers (Skipton, Nationwide, Abbey, Woolwich, Accord, etc etc).

    Those lenders that choose to ignore such a powerful distribution channel, do so at their own peril – and risk losing even more market share (The Post Office is just one example for Bank of Ireland – a disastrous move).

    Long live the broker!

  • Trevor Johnston 2nd August 2010 at 11:36 am

    Can I inform Jermey Sadler that I am a broker working from within an estate agents. The primary reason they ask people to speak to myself is to ensure those making offers are able to complete. Customers often have gone directly to a bank or done their research on the web and are not able to buy. Just this morning I have had to inform two clients that they are not in a position to buy. Why? Neither had a deposit and one was only earning £14,500 and looking at a £90,000 purchase price. The estate agents are trying to protect their clients. There is an open invitation to my office and I will explain in more detail how we work to protect vendors and purchasers.

  • chris 2nd August 2010 at 11:32 am

    Reading articles with comments like those made by moneysupermarket.com is becoming tiresome. I have been in financial services since 1984 and have always been taken an attitude of the glass is half full not half empty. However I now concede defeat, there is no point knocking your head against a brick wall and my message therefore (unless there is a dramatic change in attitude from the FSA / government) is wake up, smell the roses and get another job in a different industry. We are being shafted from all sides and no one gives a dam. The banks do as they like, the FSA turns a blind eye because they can not control them and we are ignored. There is no financial assistance to see us through this crisis. There is no other industry in the UK that is being treated like us. Jobs are being protected left right and centre in all industries except ours. Of course all industries are suffering to some degree but what is happening to the mortgage industry and brokers in particular is nothing short of criminal. The banks have set there stall out. Their goal is clear, in that they are taking an opportunity during this financial crisis to get rid of as much of the small broker industry as they can and the comparison sites have decide which ship they are jumping on as they can still make money by people going direct. I am even beginning to feel that the big brokers also see it as an opportunity as us one man band brokers have collectively accounted for a huge slice of the market. The general public do not care because all they want is the best deal and in the main if they think they can get that by going direct then off they will go. Forget loyalty, charity begins at home and clients do not understand our industry and what is going on. The majority of small brokers have given fantastic service and quality advise, but the mistake we have made is that we make what we do look easy, we take the stress and hassle away from the client to the point that clients are now confident that they can look after their own finances and mistakenly believe that they are actually getting advise in instances when the provider is not giving advice. Solicitors are much better than us in making everything look complicated and creating an environment where they are vitally needed. Good luck to them I say. Divide an conquer, that is what has happened to us. Why do we have all these trade bodies ? PFS, CII, AIM. Where are you now ? Oh yes I remember, taking your monthly DD from us small brokers and like the FSA ensuring you all have regular and exuberant incomes. It’s all pure madness. People with little money giving to others who do nothing for it. Here is my offer. If I could get a large enough number of brokers to pay me say £5 per month each and I will devote 100% of my time fighting for the brokers interests. I would be the biggest pain in the neck this industry has seen for years. Forget the trade bodies saying that they are on our side, everyone is on their own side well I feel the time has come for all us one man bands to stand together and make a real fuss. Call it a union, call it what you like, but at least we will go down fighting, making sure that top government officials actually understand what is going on, because I do not think they have a clue and that’s what bad decisions are being made.

  • Paul 2nd August 2010 at 11:29 am

    Thanks Kevin at Moneysupermarket. I am just about to commit around £3k to a general marketing exercise that includes purchase of a significant number of leads of various types. Thanks to you I now have one less company offering to take into account.

    Maybe they should make you head of sales!!

  • Graham Griffin 2nd August 2010 at 11:28 am

    The assumption is that people only buy on price. This is clearly not the case. What about affordability, level of service, efficiency of working, time it takes to book an appointment direct for starters. Recent experience is that direct lenders are cherry picking and ending up finding reasons not to lend. A larger number of people are seeking advice and 1 lender offering it’s own products, limited as they are, and it’s own insurances, overpriced as they are, is hardly providing quality advice. Do all lenders offer 2, 3 year and lifetime trackers, 2,3,4 and 5 year fixed rates in all ltv cases? the answer is no.

  • IT 2nd August 2010 at 11:23 am

    Will Moneysupermarket be closing down its Mortgage Lead Generation system to Brokers PAA Leads now that it views there to be little need for advisers to be an appropriate route by which to provide mortgage advice. Just a thought.

  • James Smith 2nd August 2010 at 11:23 am

    I am a broker who works from a panel of lenders (reviewed regularly) and I have no problem with my clients,nor with this choice of doing business.
    My clients actually get a mortgage at the end that they are very happy with,and within a decent timescale too,as opposed to the “whole of market” choice where I have had witnessed brokers praying and spraying clients applications at lenders hoping (often foolishly) that their sourcing systems are correct.
    I have had many a client come to me after being with a supposedly whole of market broker,and often having been with said broker for many weeks,even months and got no where.
    My motto is simply know your lender,know him well and tell your clients that their honesty makes,or breaks a mortgage.
    I can’t honestly say I believe those that profess to offer whole of market advice,and would love to see thier new business registers for their real split of business,i’d bet its not as whole of market as most would have us believe.
    As for Jeremy Sadler,stating all brokers should only work for a fee Jeremy would force a lot of people straight into the open arms of the banks,who would give them what these banks what to give them……………….ie very limited advice,and very limited products.Are you suggesting thats a good thing? and that advice should only be available for the better off in society?

  • Neil Wright 2nd August 2010 at 11:14 am

    “I’m looking for a mortgage and I want the best available to me. I thought I’d trawl the high street, you know pop into all the banks and building societies as I’ve got nothing better to do for the next couple of days. If that doesn’t get me anywhere, I plan to get on the internet till 2 in the morning and find the best deal that way. What do you think?”

    “I think you’ll get more choice if you let me do all that for you. It’ll save you a whole load of time and effort, and if it turns out the best deal for you is to go direct to a bank or building society, that will be my advice….Simples”

  • Bobby 2nd August 2010 at 11:13 am

    Reluctantly and after the biggest fight of my life for over 2 years it is time to give up now guys. Our profession is over through no fault of our own. Now someone has a go at brokers for not being able to get the direct deals as if somehow thats our fault or its what we want. You couldn’t make it up.

    No life really is too short for all this. I made the decision over the weekend to give up and its now like a relief.

    Its the customer and industries loss though as I have helped around 2000 clients to get a mortgage in 2 decade and do not have a complaint registered against me.

    All my clients want to use me and no go direct but they can’t. The lenders and FSA have wiped out the broker but that what they wanted all along. We can’t fight against these organisations and no one is fighting our cause.

    I am sending them all my clients letter this week to inform them of my decision.

  • mark wilkins 2nd August 2010 at 11:08 am

    WOW!!!Let the games commence!!!!

  • Phil 2nd August 2010 at 11:07 am

    The only reason that the best deals are direct is the duel pricing system by lenders and the deals the lenders offer at 90% loan to value that brokers can not get near to.

    I see a lot of first time buyers who only have small deposits – but to be fair to the borrowers I tell them to go direct to banks since brokers can not compete with these rates. The lenders want this business direct as they can then sell all their top up products.

    Yet if you look at deals for 75% ltv and below then the lenders want our business, since it is low risk.This is mainly remortgage business and therefore less top up products are sold.

    Therefore lenders are not treating the customers fairly as they are only looking after their own interests

    If the FSA was acting in the interests of the consumer it should have stopped duel pricing by lenders at the outset. If lenders want to go on there own like HSBC then fair enough. But if lenders can offer similiar rates to brokers for the deals at 75% ltv and below (the low risk business) why dont they offer the same at deals at the higher loan to values. These are the questions the FSA should have been asking them at the outset.

    As for moneysupermarket.com they are only trying to promote their own site. Clients need advice- I do not know how many times I have clients tell me that they have seen a cheaper deal on a comparison site, but when I look into the deal they are not eligable for it. Today one of my next time buyers emailed me rates 0.4% below what I had quoted them, yet when I checked the deal they were looking at it was for a 60% loan to value loan when they need 75%.

    If you ask many clients they want advice through the mortgage process. But the way the lenders are trying to extinguish the broker business this may be a thing of the past

    Yet again FSA do something for the cunsumer and not for the banks before its to late – even if its your last act.

  • Jeremy Sadler 2nd August 2010 at 11:05 am

    Lots of morals on display BUT ; 1st time buyers use brokers because estate agents force or trick them into it ; The attached brokers lie about their independence and the products. The lenders know this full well and price products accordingly and if the FSA are not turning a blind eye they are incompetent. ALL brokers should be forced to work on fees only and offer advice covering direct products; Then the consumer can make an informed choice. And apply the same rules to “inhouse” bank advisers. ALL customers can rely on any decent broker to get them the best deal IF they are willing to pay a fee for the service they receive. If they go direct “caveat emptor” applies.

  • rob davies 2nd August 2010 at 11:02 am

    Consumer research shows that whilst comparison sites are increasingly used by mortgage shoppers as a source of information, they just do not deliver sufficient detail or confidence for shoppers to proceed with their transaction. The most common pattern for a shopper who has started their mortgage search online is to go to a broker armed with information but needing someone to make sense of it all.

    This is the brokers’ opportunity to ‘sell’ their value to an informed customer, to seal the deal and to keep them for their next mortgage or other FS products.

    Comparison sites are useful for comparing rates and some features but ultimately they cannot answer personal questions or rank on appropriateness.

  • Petro 2nd August 2010 at 11:00 am

    I haven’t left a comment before… but this has angered me. They promote an adviser service to their site, and in turn sell us leads… by devaluing the Intermediary, has that meant that they devalue the service they offer to us through paaleads.com. I am starting to suspect that they may be earning a better return as affiliates/advertisers of the lenders direct deals. Maybe a Broker Boycott may be in order.

  • Trevor Johnston 2nd August 2010 at 10:59 am

    I have just contacted moneysupermarket.com and they have agreed to remove the comments from their website with immediate effect.

  • Louise Cuming 2nd August 2010 at 10:59 am

    ‘blistering attack’?! Surely not. Rate is only one consideration – and for the fortunate few with an inside leg measurement of x; height of y and bags of stable credit history; employment; income and an equal bucket load of equity – there is no doubt there are some impressive direct deals. But unfortunately an increasing number of us do not fit into that box – so the Broker industry need to be supported and nurtured because so many people need their expertise in fitting needs to Lender. I am absolutely sure Kevin will agree with this sentiment

  • Ged 2nd August 2010 at 10:58 am

    Just time to explain why we are charging a fee instead of letting the customer run around like a headless chicken. Be straight from the start you recommend all products including directly sourced products to save them running around. Banks are idiots as well as the FSA.

  • John Toogood 2nd August 2010 at 10:55 am

    The 90% of deals that are available direct from lender are presumably included on moneysupermarket.com comparison site. If this is the case, I assume moneysupermarket receive a fee from the lender if the client is introduced via their site. Why will the lender therefore not allow a broker to introduce the case to them for a nominal fee(same as moneysupermarket)and at least they would have the confidence that the client was receiving FSA approved advice rather than no advice at all?!?!

  • Greg Oxenham - MORTGAGE ID 2nd August 2010 at 10:55 am

    The day the FSA wades into this argument and declares that consumer interests are better served by comparison websites is the day I close my company and move into a non regulated financial services role.

    It is beyond comprehension that the FSA has not come out and made a clear statement of intent over this matter. There is no better single tool to inform the mortgage buying public than whole of market specialist mortgage advisers.

    Comparisaon websites have a an entrenched position to defend and that position is entirely dependent upon them selling advertising around the information they dispense. Their information may also advise but it is does not recommend. Consumers have been clearly proven to need clear recommendations. If we as an industry continue to allow these self serving organisations to distort the facts and not insist that the FSA intervene to regulate the comparison sites we deserve much of what we get.

  • Alan J Nadin 2nd August 2010 at 10:53 am

    I truly hope that the usual apathy does not apply to responding to this petition. Brokers, IFA’s, business owners and Networks all need to sign the petition and encourage trade bodies to respond too, which I am sure they already are. It is clear that the comparison sites and a number of lenders believe they can finally squeeze us out. Terrible information and no advice…..clearly not a freat choice, save for those who really don’t wish to take any, it is not for all!

    It will be too late to moan if the community does not act together, regardless of how big or good you think you are, it is all of our futures.

    Brokers and IFA’s still do offer the last word in advice and choice, particularly taking into account some of the instances reported concerning the low quality of Bank Advice from many clients and a total lack of understanding of anything that is not extremely straightforward.

    It clearly isnt the broker community’s fault that only a small percentage of the very lowest deals are not through us, particularly when the lenders orchestrate that anyway!! Clearly the stats on volumes and who from show that consumers deserve better choice through brokers as they trust us the most!!!

  • Adey Stuttard 2nd August 2010 at 10:45 am

    The reason people use brokers is that not only are they getting the best advice and recommendation on the thousands of potential products available, but also getting advice on fully protecting their mortgage to ensure they can stay in their new property – something Moneysupermarket et al do not do! There is more to mortgages than just mortgages…..

  • C. Macdonald 2nd August 2010 at 10:44 am

    People come to brokers for advice and not just this comparison site. The lending criterias for lenders is a nightmare now and the one thing comparison sites do not do is give advice. This is just moneysupermarket.com touting for business and trying to put people off the broker market. I am whole of market and I also use my system to look at direct deals and I do tell my clients about them, because that is what a good whole of market broker should do. Panel brokers may find it harder, but, still they offer advice and discussion, which is what most clients want.

  • John Baker 2nd August 2010 at 10:43 am

    Does this mean their lead sales are down? After all, when they were selling shed loads of leads a few years ago this wouldn’t have been released. Perhaps if their quality and refund policy wasn’t as woeful as it is, they might be making money from the leads. I haven’t used them for several years purely because of this.

  • Bob Young 2nd August 2010 at 10:41 am

    This company clearly forgets that it made it’s name as a packager / distributer of mortgages. They’ve gone on to better times and it’s a shame they choose to attack the industry they once were supposed to support.

  • John O'Hearne 2nd August 2010 at 10:40 am

    Of course banks want customers to come direct, that way they can trip them up with hidden fees and tie in clauses. Only an independent professional adviser can explain honestly the ins and outs of lending without being biased.

  • Suzanne Gore 2nd August 2010 at 10:36 am

    I have never put on comment on before but this made my blood boil – perhaps some brokers use a version of a sourcing system that shows direct products or more importantly that cheap direct deals often have such tight criteria’s 95% of my clients cant get them anyway and not because they are adverse or self cert !

  • Carl S Hall 2nd August 2010 at 10:35 am

    Another kick in the teeth for brokers.