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Brokers miss out on proc fees with thousands of Halifax rate switchers

Brokers are missing out on a procuration fee with thousands of Halifax customers looking to switch products.

The lender says in the run-up to the MMR, thousands of customers were on products that would not sit on its new, compliant system.

It means these clients cannot have their product switch carried out by a broker and must instead be dealt with direct with the lender. Halifax says it cannot change this otherwise there would be “regulatory compliance risks”.

Halifax is one of the few lenders to pay a full proc fee for rentention deals and says brokers will be able to carry out any other future advance or product transfer and receive a proc fee.

While Halifax refused to give out the exact number of these borrowers, it said that only 4 per cent of brokers’ customers on existing deals are affected. It did, however, confirm that they numbered in the thousands.

A Halifax spokesman says: “While the vast majority of customers are able to follow our usual processes for product transfers, a small percentage of brokers are impacted by this.

“It means Halifax will have to take responsibility for the advice given and as such no procuration fee will be payable in these circumstances. There’s no detriment to customers and we’ve set up a specialist team to ensure they’re still able to access product transfers.”

Halifax says it informed brokers through BDMs around 18 months ago, although some brokers seem to be unaware of the issue and say they should have been informed in writing.

Chapelgate Private Finance associate director Colin Payne believes the lender should implement a manual solution that allows brokers to continue getting paid.

He adds: “I am very disappointed with the stance of Halifax; it is a lender that has always had a focus on retaining existing borrowers and brokers have been integral part of this strategy.

“It is the only lender to remunerate brokers in full for product transfers emphasising the important role a broker plays, yet is not prepared to resolve this issue, which is of its own doing, to allow brokers to suitably advise their clients and be remunerated accordingly.”



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  • Paul Slack 4th June 2015 at 5:59 pm

    My first experience of this issue today, requested info on 4 existing clients accounts and 3 out of 4 said the client had to contact themselves to arrange transfer. Me being a clinical broker have raised my concerns with bdm as we were definitely not told of this problem 18 months ago. I’m sure my maths is correct but 3 out 4 sure seems higher than 4% ! The strange thing is one of the cases I had already requested in March and they sent me figures !!!!! I guess they are so arrogant now with the amount of business being received that they think they can just nullify a justifiable income stream to brokers who have been loyal to this lender.

  • Ellie 21st May 2015 at 10:33 am

    Although the proc fee is nice ( we do have to earn a living after all) – my concern with this having had a client who is in this 4% and not even knowing about it.
    Firstly I told them that I could act for them and then found couldn’t over something I had not even be made aware of.
    Secondly is that I have only just found out that if they go direct it is NOT a product switch but a FULL remortgage application – which means if anyone in this 4% is a ‘mortgage prisoner’ and cannot remortgage they will be unable to product transfer direct or with broker – whereas the other 96% can use broker and product switch even if they are a ‘ mortgage prisoner’ – think the impact to the clients in the 4% need to be looked at as well as the proc fee .

  • Stuart Gregory 20th May 2015 at 11:38 am

    Add Clydesdale to that list…

    They recently made a big fuss of offering 0.20% proc fee for retaining the business for them (50% of their new business proc fee).

    HOWEVER, if your client didn’t originally apply through a broker, guess what – you’re not allowed to process the product switch!

    Two tier system in force……

  • Chris Hulme 20th May 2015 at 11:19 am

    Halifax are to be commended for their support to the broker market enabling the proper and professional care clients deserve and for the work done to be remunerated for that professionalism.

    I wonder whether Halifax misread TCF and Transitional Arrangements, or rather misinterpreted them? The “process” by which a client takes on a new product should not influence the outcome for the client if there are no other material changes to the loan structure.

    Halifax did indeed hold various sessions in March 2014 outlining their MMR processes… but so did 70 or so other lenders bombarding brokers with monumental amounts of information on each lenders take on MMR and the changes expected.

    Perhaps the policy writers within Halifax have created a system that prevents them from performing equally across all advice processes for the betterment of the client….

    13 months in, rather than making headlines out of 4% of cases with a “look what you could have won”, perhaps Halifax should assist brokers in dealing with those cases to eliminate that Regulatory Compliance Risk.

    • Anonymous 26th May 2016 at 11:52 am

      I am one of these mortgage prisoners .. Unfortunately for Halifax I’m a process consultant who has worked on numerous FCA / complaints / system migration with banks , building societies and CRA’s

      There is detriment in terms of the consumers credit file for the new application ..

      Completely against TCF .. How are all customers treated fairly if 96% of the base were migrated??

      This is a way of fiddling the brokers out of their fee by forcing the applicant to go direct