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.”