Lenders who pay fees contribute to better service for clients
The introduction of the MMR in 2014 had a significant impact on brokers’ workloads due to the more stringent affordability testing and lengthier advice process it created.
Most lenders have raised their procuration fees to reflect the changes, but retention proc fees have been almost forgotten. It is paramount that more lenders pay proc fees on retention business. Brokers still need to go through the full advice process in these cases, requiring them to dedicate an equal amount of time and effort as they would with new business.
Tasks such as maintaining contact with clients and holding regular reviews, as well as notifying customers during the months before maturity, are a significant part of a broker’s role. Intermediaries should be rewarded for providing the best advice for the customer but equally they must play their part by ensuring they are not just concentrating on new business.
Lenders should invest in their systems to enable the payment of retention proc fees, so brokers can, in turn, invest further in their own systems and provide a better level of service for the customer.
Paying a fee for retention business will also benefit lenders who choose to do so.
Building goodwill with brokers helps with relationships, increases awareness and boosts choice, creating a win for all parties. It is encouraging to see more lenders, such as Cambridge Building Society, beginning to recognise this.
That said, there is still a long way to go. I hope to see more lenders follow in Woolwich, Halifax, BM Solutions, Clydesdale and Metro Bank’s footsteps by making retention proc fees part of their new year’s resolutions.
Jeremy Duncombe is director of Legal & General Mortgage Club