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BSA Conference: Countrywide CEO accuses brokers of holding lenders hostage

Grenville Turner, group chief executive officer at Countrywide, has welcomed the fact that half of mortgage lending is done direct and accused the broker marker of effectively holding lenders hostage in the run-up to the financial crisis.

Turner gave a presentation to delegates at the Building Societies Association annual conference in Manchester today outlining that around 50% of mortgage business currently being generated comes from the direct channel.

He says: “We’ve seen a change in direct mortgages and I think that’s a good thing so that lenders shouldn’t be held hostage by intermediaries.

“There should be a balanced market where consumers are able to get advice and equally where lenders don’t become overly dependent on that source of business.”

When pressed Turner says that between 2005 and 2007 a significant majority of mortgages were being arranged by brokers which gave them too much influence over lenders.

He says: “The power that intermediaries held to influence lender decisions was probably in excess of where it should have been.

“What we needed to move to was a situation where the intermediary sector is important and healthy and encouraging sector, but not necessarily a dominant one and certainly not to the level that they can hold influence over the lenders.”

He adds: “I’m all in favour of an extremely healthy adviser sector – I would be because I have 750 business writers who are intermediaries – but I think a healthy sector is one where this is a sensible balanced relationship between the lender and the intermediary and the consumer. And I’m not sure that balance was there in 2005 and 2006.”



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  • John Atkin 13th May 2010 at 1:32 am

    Grenville has always been able to stir up comments however, there’s no getting away from the fact that he’s done extremely well for himself in his career, well done Gren. However, coming from a Building Society background he may have forgotten about the hand(s) that used to feed him.

  • Chris Mayor 7th May 2010 at 2:46 pm

    Whilst I can see what he is trying to get to, I believe he shows a lot of one eyed nievety. Brokers do not control lenders. Shareholders, the city etc., do. This is due to the push of market share etc.. Large networks influence perhaps? However, a balance would be a good thing if lenders were on a similar par to advisors. Providing advice, rather than hiding behind “no advice” during their “free financial reviews”. If the FSA want to be clear to the public, then the public need to be very clear about high street offerings. No dual pricing, would mean that the client would pick the advisor they were most impressed with. Level playing field on qualifications, responsibility, advice products and then let the best advisor win.

  • Jon 7th May 2010 at 10:04 am

    As already has been indicated Grenville Turner was Head of Intermediary Sales at HBOS and therefore in a position to see the influence brokers had on lenders underwriting and pricing – however it should also be noted that lenders’ new business targets were unrealistically high and put them in a position to be influenced by brokers and mortgage clubs to attract sufficient business to reach those targets.

    Whilst brokers may feel they didn’t influence product pricing, underwriting or procuration fees, they did indirectly via mortgage clubs (such as PMS, L&G, Mortgage Times, MI etc) and packagers demanding increasingly competitive products and higher fees – the reason that organisations like RAMP and PMPA were formed was so packagers could amalgamate their business volumes to demand better fees and products from lenders.

    In the article Grenville Turner said – to quote:

    “There should be a balanced market where consumers are able to get advice and equally where lenders don’t become overly dependent on that source of business.” …………………………….. “What we needed to move to was a situation where the intermediary sector is important and healthy and encouraging sector, but not necessarily a dominant one and certainly not to the level that they can hold influence over the lenders”……………………….. “I think a healthy sector is one where this is a sensible balanced relationship between the lender and the intermediary and the consumer.”

    To me it sounds as if Grenville Turner is supporting a strong broker market.

  • Paul Rogerson 6th May 2010 at 7:00 pm

    Typical brown nosing up the lenders arse who lets not forget they always “Give best Advice” don’t they ?

    Oh I forgot the FSA all Pi** in the same pot as Turner and his cronies

  • Richard Lloyd Jones 6th May 2010 at 4:32 pm

    Is he Gerald Ratner in disguise?????

  • Neil Bellamy 6th May 2010 at 3:31 pm

    I quite agree with the comments from readers Grenville should really make a public apology for his unwarranted, and unfounded remarks. Bear in mind that before Countrywide he was head of Intermediary sales at HBOS! Lenders simply do not like the whole of market mortgage broker becuase they cannot offer a service to match this.
    I recall from my many years working as a mortgage advisor within HBOS, that they have always wished to rid the UK of Brokers – I heard this from this mans lips in person!
    Always remember that Banks, and Building Societies really only answer to their shareholders, and members usually profits are the only focus – a consumer will never receive best advice on this basis from a single provider.
    After I became a whole of market independent adviser, I have also come across clients who were happy to use my services. When they found a proptery marketed by Countrywide they told me that they ‘had’ to use Countrywide’s adviser as then they would be given ‘priority’ over others offering on the same property as they would know that they are good for the mortgage.
    Why on earth cannot the government, FSA, and consumer groups see that consumers need an independent adviser when taking out the largest financial transaction of most peoples lives? For these reasons direct selling of mortgages should cease immediately. If this was the case the compulsory use of a third party Independent Broker giving best advice which is evidenced would mean that a reasonable fee could be charged – Lenders could then stick their proc fees where the sun does not certainly shine – shame on him!

  • anon 6th May 2010 at 2:53 pm

    The only reason that Countrywide think lenders should offer better products to direct, is that as a large introducer they can bully the lenders into giving them exclusive deals. These deals are on a par with the direct only deals,thereby obtaining more mortgage business. Unfortunately, people in the position Mr Turner has do not make silly comments without a hidden motive!!!

  • Stuart Gregory 6th May 2010 at 2:10 pm

    Having being offered a role with his organisation prior to starting my own firm, his comments are not a surprise to me.

    The managers in his advisory arm are no more professional than second hand car salesmen who base their selection process on offering a basic salary akin to a cashier in a building society.

    Oh, and a basic model Astra.

    Appealing if you’re 19 and fresh out of college I guess….

  • Graeme Ferguson 6th May 2010 at 1:48 pm

    How odd!!! Yes I had so much influence in 05/06 I made all the lenders do whatever I wanted like lend money to an Alien from Mars!! If I was a shareholder in Countrywide I know who I wouldn’t want running my business. And as for Countrywide being in the intermediary business well that is more shocking news than the rest!!!

  • Ian Barrow 6th May 2010 at 1:05 pm

    may be they were his tactics,he should look at his own business before pointing the finger.

  • AN 6th May 2010 at 12:43 pm

    Did i miss something? yesterday there was talk of first time buyers, so ill advised they should be made to sit an exam?

    What this country, in EVERY aspect, is lacking is any focus on ‘looking after’ people, there is no customer service anywhere anymore, banks are not trying to do best by their clients they are trying to make money so they can pay themselves HUGE bonuses. I became a broker as i felt it meant i would be able to actually ‘help’ people, how novel, imagine that? Someone that actually wants the best for you!

    Well my attitude has served me well as all my well ‘looked after’ clients have stuck by me through these difficult times and enabled me to continue trading.

    For someone to say this level of service in not required and is not a good thing, can only have an ulterior motive, probably involving cash in their own pocket. London is full to the brim of rich, selfish, opinionated men, who supposedly know what’s best for us, and i’m SICK of it!

  • Manc AL 6th May 2010 at 12:05 pm

    Both Grenville’s and the comments from Wild Bill at 09:18 show them to be naive and possibly weak minded, which is surprising given someone of Grenville’s provenance in the FS industry! Balance is always good in everything, this is accepted, but when comments concerning brokers holding lenders hostage are made by someone who has held very senior roles you question their wisdom and motive.

    To suggest that brokers/Networks at any level ever told the lender that they should compromise their responsible lending obligations, or break policy at any time in the past and that not to have been highlighted to the FSA is laughable!

    No-one tells you what to do unless there is a legitiamte business reason to do it and it is acceptable within regulatory boundaries, simple as that!

    Furthermore, I haven’t yet met a lender where the senior managegement team would capitulate to any business if it wasn’t right and I’m sure they would go to the FSA if Networks were asking them to break rules and guidelines. I say that respectfully as far as a lender’s integrity is concerned. I think it shows incredible contempt to Networks and for the committed, professional and independent brokers that remain.

    There needs to be a halt to the continuing justification of lenders of raking out a mass of direct deals, undercutting intermediaries, who have been extremely loyal to many of the big lenders in the high street since the mid-late nineties to date and continue with that view, despite direct deals.

    Remember the word ‘Loyalty’ it is seldom recognised or respected! Finally, with regards to the issue of advice… own and many industry colleagues experience constantly evidences that a vast range of mortgage clients receive a very little or no advice and where they do receive advice, it is of poor quality. Rightly, the FSA are investigating the quality of the advice models operating within the high street and hopefully they will be exposed for what they are and made to rectify asap.

    The one thing I do agree on, is that consumers deserve the best choices and advice, but in reality, the people that you support with your comments Grenville and Wild Bill are the ones, who are not really facilitating this due to poor quality advice and by restricting independent broker access to all deals, the clients who trust brokers and IFA’s more than Bank robots for their industry/more real world experience, are actually not being allowed access to the choice they deserve, but still much better than the restricted suite of products with poor advice they get by visiting one place!!!

    IFA’s and Independent Mortgage Brokers are the lifeblood of the FS industry, always have been, I ask the LIFE Co’s and Mortgage Companies to show at little respect aduring these difficult times please.

  • Das 6th May 2010 at 11:53 am

    Has this gentleman ever spoken to his countrywide based advisers? My information is that they are not whole of market and work from a limited panel. He is out of touch. We as intermediaries do not dictate any terms. We treat our customers fsirly at all times and recommend and advise based on their circumstances. The lenders move the goal posts and we have more work to do as a direct result of independently representing the best interests of our clients and not those of the lender

  • Mike Hughes 6th May 2010 at 11:48 am

    Sounds like currying favour to me. Not too surprising though, bearing in mind the way his ‘nail their feet to the floor’ brokers treat their unfortunate clients. I don’t suppose Countrywide are awash with repeat business for their limited panel of lenders. Most former Countrywide clients that I know are once bitten, twice shy.

  • ac 6th May 2010 at 11:35 am

    What utter tosh….Brokers having too much influence over the market. In how many ways have we been shafted when the funds dried up and they no longer needed our distribution. Just showed how respected and how much influence we have.
    Clients dont get advised by the lender, they get sold poor protection products and only one brand of mortgages.
    Banks are shops that sell money as expensively as they can, with poorly trained mortgage salesmen. I can go toe to toe with any branch mortgage adviser and we will see who gives the best quality of advice (sorry my mistake they don’t give advice)As for service levels I will knock all lenders out of the ball park. So the only issue I have is dual pricing/ unvailability of products – so Mr Turner who has got the short end of the stick – The Banks or the brokers (and their clients) You are absolutely on another planet my friend!

    Or are you trying to say that this crisis is our fault. Is it our fault self cert products or 130% lending was made available. They were sold by us but I know in my case the client was fully aware of the risks, alternatives and more checks and balances were in place than if they had went direct.
    I have an 8 year deep client bank and to date have had no repossessions. Lets see any bank match 0% – it wouldn’t be their fault anyway would it BECAUSE THEY DONT GIVE ADVICE. Do me a favour.

  • f mallon 6th May 2010 at 11:34 am

    The mortgage market will change as a broker i can charge for advice wether it be a direct deal or not and thus retain the client.
    cross sales selling other services thats what the lenders want.
    we are continually contacted by lenders looking us to recommend savings accounts yet they operate dual pricing

    one nameless lenders financial advisers are now called deposit managers trying to get money in.the financial crisis is not over!

  • Roger Jones 6th May 2010 at 11:15 am

    The fact he was talking to Building Societies may have had something to do with his ridiculous comments

  • john higgins 6th May 2010 at 11:13 am

    the comments made by Turner are of no surprise. Turner’s background was working with Halifax and he didn’t support the intermediary market there either. It was just lucky that he didn’t hold a senior enough position to hurt the Halifax intermediary business. Its just amazing how he has held the position of CEO with Countrywide!!!

  • jim Tomczyk 6th May 2010 at 11:00 am

    dont agree with his comments – however are they surprising ? – after all he was talking to BSA delegates – who presumably invited him as a guest speaker – hes going to tell them something they want to hear – especially if his next meeting with them could be to agree some exculsive product access/ distribution for his 750 business writers ??!!

  • sbuc 6th May 2010 at 10:54 am

    Strange commemnts, considering his position, although I think I understand what he is trying to say.

    There should be a market for direct and introduced business, but the lenders need to drop dual pricing.

    My recent experiences also indicate that introduced cases do not get any degree of service in comparison to direct cases.

    I think lenders need to decide are they IN or OUT of the broker market, if the latter then withdraw completely do not try and use the usual stealth tactics and tehn say there is no market for the products.

    if a new provider was to come out and say broker only cases with reasonably competetive rates and high service levels they would clean up.

    however it appears as though the current lenders are more interested in selling insurance/credit cards and current accounts.

  • Neil Flint 6th May 2010 at 10:53 am

    The last time anyone said anything this daft was Gerald Ratner.

    It never ceases to amaze me how some of these people get in to the position they are in. Frankly how they stay there is even more amazing.

  • Julie B 6th May 2010 at 10:48 am

    I have a few clients who’ve arranged “Direct Deals” with lenders without taking any advice.

    Unaware of the ramifications of redemption penalties, which were not made clear by the lender it has put them into serious difficulties struggling to make monthly payments due to fixing their mortgages at high rates.

    It’s not just about mortgage advice, it’s about advising a client how best to manage their money and discussing their options. It’s part of the service, which lenders simply don’t provide.

  • Mike Lathbury 6th May 2010 at 10:46 am

    So countrywide have `750 business writers who are intermediaries’. Until they start treating customers fairly ( maybe start by outlawing the: you will need to see our financial adviser before we can submit your offer syndrome or the one about the seller insisting that the agents financial services are used, this despite buyers advising that they have an independent financial adviser. Can anyone else see that there is also a conflict of interest when the selling agents and `business writers’ share the same building ? Perhaps also lenders want more direct business taking in to account some of the income multipliers and deals encouraged by some people in the mortgage marketplace in the last few years ( I would not of course wish to include Countrywide in this last comment ! )_

  • John Reid 6th May 2010 at 10:42 am

    Wild Bill | 6 May 2010 9:18 am

    I take it you work for a lender also…. what influence has the majority of the broker world got on the banks… we wont talk about the banks influence on the Government which has managed to ge tthem out of a few scrapes lately !! We wont mention the influence the banks have on the Government to make them delay regulations therefore causing the biggest disaster since the 20’s. Are you joking that you think this man talks sense? It has nothing to do with this being a broker site it is about the consumers getting actaul advice rather than any old mortgage that is available… its the brokers that keep the lenders competitive.. if it wasnt for us searching the whole market for the best deal the banks would all get together and put the prices up of all their products … if you dont think that would happen you are very stupid. The banks are trying to push the brokers out the market and at the moment it is working.

  • Mike 6th May 2010 at 10:41 am

    It was common for many intermediaries to demand “special” products with favourable deals, not available generally, as they would otherwise not submit appications to lenders who did not comply. Nothing wrong with that if it helps the customer, but it’s a form of dual pricing which everyone is now quick to forget.
    Equally overlooked is the fact that most lenders have at varying times experienced increases in the volumes of products sold through intermediaries after responding to demands to increase proc fees, even though the product terms remain the same. You call this good advice?
    Yes there are many very honest and ethical brokers, but equally some commentators are too quick to throw stones from within their glass houses.

  • Kevin Fowler 6th May 2010 at 10:35 am

    Can someone who was there confirm if he had one glass too many. It is one thing to be polite to your hosts but selling your soul was never required. Sadly this is about the standard I expect from the estate agency world.

  • John Reid 6th May 2010 at 10:34 am

    Being a small broker I have absolutely no influence on any lender and never have done… If I had then there would be no dual pricing for a start.

    I take it this numpty is talking about Countrywide and the influence they have over the panel of lenders they use. FSA have you seen this…. do somehting about it. !!

  • Dermot Brannigan 6th May 2010 at 10:10 am

    I think we’ve missed a trick here, chaps!

    If only we’d realised how much influence we held over lenders, we could’ve got them to design better products!

  • Ketan Yadav - Avenue & Co Private Finance 6th May 2010 at 10:08 am

    Shocking comments from someone who clearly has a grudge. Turner has some real homework to do.

    If it wasn’t for brokers, most lenders will not have the level of new customers as they do.

    Brokers will always play a valuable part of distribution for many lenders, and many will dual price.

    Customers like a good service, independent advice and coming from a professional, thats why he has a salesforce.

    Unfortunatley for Turner, and brokers alike, dual pricing will lead to a further collapse in activity and the number of brokers, but we have to live with it, or move on –

    …what’s your choice?

  • John 6th May 2010 at 10:07 am

    I would suggest he has lost the plot, how did we have a stranglehold over the socities, the underwriters always looked at cases like it was their own money, even when lending was simpler.

    Bizarre comments

  • john Tidswell 6th May 2010 at 10:07 am

    What a cock

  • . 6th May 2010 at 10:01 am

    I cannot believe what I am reading. Dual pricing is killing brokers and it is the lenders that is holding brokers ransom with poor service and attitude.

  • Jim Thompson 6th May 2010 at 9:59 am

    Interesting comment from someone whose largest part of his business life was working for a lender – HBOS group. Are the remarks a legacy of how he saw the relationship when he worked with the lender. Perhaps he thought the balance was not fair on HBOS at the time and that has left an impression which is not valid or appropriate.

  • Peter Ireland 6th May 2010 at 9:59 am

    Mr Turner head of 750 brokers reinforces the views of many that brokers such as Countrywide with their “buying” power have influenced lenders.
    Perhaps one reason why lenders offer direct deals is because origination via large brokers with “enhanced” proc fees due to volume has got too expensive?

  • Ron O'Brien 6th May 2010 at 9:58 am

    Unbelievable comments!
    Talk about Ivory Tower comments.

    Anyway, given their panel arrangements what would he know about true whole of market advice.

    I wonder if his brokers are happy that over 50% of the available mortgages are “Direct only”. Comments anyone?

  • John O'Hearne 6th May 2010 at 9:58 am

    The only ones being held hostage are brokers and in turn their clients. Independent advice is the only way to treat customers fairly.Direct advice tends to be ‘information only’ as the majority of bank and building society staff are insufficently qualified or experienced to give advice. Mr Turner’s comments are straight from the Gordon Brown school of economics, lenders haven’t been influenced by brokers but by greed, he’s playing the Gordon Brown blame game if you ask me.

  • Steve C 6th May 2010 at 9:55 am

    I have heard Grenville Turner speak, he has his own interest at heart. I am sure his comments will have an alteria motive.

    Are his comments regarding the market between 2005 and 2007 a reflection of how he conducted his own business. Mr Grenville do not tar all brokers with the same brush.

  • Ian Britton 6th May 2010 at 9:54 am

    What a plonker. He is way out of touch with the market place. If you leave the general public to the mercy of the direct lenders they will be stitched up! There is a definite place for the broker to make sure that this does not happen and use whichever route is best for the client. I am old enough to remember when there was an implicit cartel operated by lenders and we do not want this situation again.

  • John Lacy 6th May 2010 at 9:53 am

    The amount of bollocks Mr Turner is talking makes me think that he must be related to Gordon Brown!!! I seriously suggest that he lies down in a darkened room and engages his brain before speaking in public again

  • Graeme Ferguson 6th May 2010 at 9:49 am

    How odd!!! Yes I had so much influence in 05/06 I made all the lenders do whatever I wanted like lend money to an Alien from Mars!! If I was a shareholder in Countrywide I know who I wouldn’t want running my business. And as for Countrywide being in the intermediary business well that is more shocking news than the rest!!!

  • Dale Knight 6th May 2010 at 9:48 am

    I cannot believe Countrywide comments like this. As an ex-packager who soley used them I feel betrayed to be honest.

    I am sure they are simply a transparent ploy to allign themselves closer to the lender market and gain more business, which shows how shallow he is.

    The fact is he is so mis-informed it is shocking for his position in the firm.

    The consumer will always take independent advice over tied as it is in their best interests and why such a vibrant lending community is established in the UK today.

    The fact is lenders have milked the industry in the good times just like brokers and they did it with their eyes open. The only reason why diect is building is because of dual pricing which is immorale and against treating customers fairly.

    People have to be very careful about how far they push the intermediary sector, because specialist lending will return and the battle will once again commence.

    Lenders being held to ranson by brokers…………… must be having a laugh.

  • Joy Bowden 6th May 2010 at 9:46 am

    This man talks utter nonsense & I would expect a CEO to have more common sense than deliver a statement like that!My children could give a more balanced view on this than he has. Brokers need a livelihood the same as he does. How much does he get paid???!!

  • Peter Wilson 6th May 2010 at 9:46 am

    “There should be a balanced market where consumers are able to get advice.”

    This man obviously believes that the clients going direct actually receive advice. We all know in reality that they do not receive advice in most cases.

  • Mike 6th May 2010 at 9:44 am

    This chap seems to have his words muddled up. Lenders being held hostage by Intermediaries!?

    For the past 12 months, it’s the other way round; Dual Pricing, Changing Criteria without publishing it, Pulling rates with less than an hours notice.

    The dominant lenders have the market cornered and as brokers, we have nowehere else to go if we are to offer best advice.

    The lenders attitudes and conduct flies in the face of TCF and has the broker market run ragged trying to work out how to get a case through.

    I would welcome the writer of this article to make contact with brokers to understand a little more as to who is being held hostage, who is being treated fairly and who are the advisers that provide choice, advice and a decent level of service!

    It certainly isn’t the direct channel.

  • Wild Bill 6th May 2010 at 9:18 am

    Truth Hurts…..The guy talks sense! Obviously the article is going to get bad reviews on here?? It’s essentially a broker website, comparable to the Daily Mail publishing a positive article on Labour.

  • Jonathan Miller 6th May 2010 at 9:15 am

    Very odd comments indeed!

    I fail to see how the Intermediary can have any influence over a lender and indeed their policy. The lender recognises the intermediary distribution network and in some ways exploits it by turning business levels on and off where necessary……not the other way round.

    A far healthier market would be no more dual pricing i.e. the Woolwich model and clients able to compare deals and indeed quirks of each offer against each other deals rather than the single lender advice they will get from a bank direct.

  • Bobby 6th May 2010 at 7:22 am

    The guy should be utterly ashamed of himself. I would like him to visit a family who are bankrupt and losing their home as the mortgage broker was destroyed through lenders dual pricing and say that to their face.

  • Geoffrey Chaucer 6th May 2010 at 12:01 am

    What a strange comment from the CEO of an ‘independent’ broker.

    If the balance shifts too far to the lenders direct then it will be interesting to see if Grenville can continue to keep his staff as they won’t be writing any business.

    As a broker, I have seen the change from lenders wanting broker business and then wanting direct business, hence the disparagy between the rates.

    As we all know, lending criteria is as tight as ever. Dual pricing is killing off brokers and the principal lenders are calling all the shots.

    I would suggest that Mr Turner reviews his comments. If we should see a double dip then he will perhaps be wishing for more lender flexibility rather than less.


  • Andrew Charles 5th May 2010 at 10:46 pm

    On what grounds does Mr Turner believe the “Intermediary” market had too much influence over the lenders? Baring in mind the true intermediary market just offered (may be I’m being a little naive) the most appropriate mortgage product to fit their needs at the time. Think of the implications to the individual should a first-time buyer go in to see a single tied (for mortgages and insurance) supplier and end up not receiving the most appropriate product on the market. The reason why most intermediaries (the ones who don’t work from a ghastly panel of six lenders) are such is because they want to provide the best advice to their clients – the only way of doing that is by offering independent mortgage advice.