LMS highlights product transfer “advice gap”

Data collected by LMS shows that over the course of 2018, 47 per cent of product transfers will have taken place on an execution basis without advice.

The data shows the value of the product transfer market is expected to surpass the £150bn mark by the end of this year, with nearly 1.2m homeowners switching products with their exiting provider.

However, LMS believes that only 610,000 of these transfers, equivalent to £80bn, will be conducted on an advised basis.

The firm outlines the fact that the quantity of non-advised mortgage sales has dropped in the last 10 years, falling from 35 per cent in Q2 2008 to 3 per cent in Q2 2018, which suggests another 44 per cent of product transfers should be advised.

LMS says given the clear rise in the wider market, this represents an “advice gap” in the remortgage process.

The product transfer market has seen changes to brokers’ fees, with move to incentivising intermediaries to contact customers before their current mortgage deal expires.

LMS chief executive Nick Chadbourne says: “Our research suggests that over the course of the year, 545,000 borrowers are going to have undertaken an execution-only product transfer.

“Even a 0.25 per cent saving on a £150,000 mortgage could save borrowers a meaningful amount of money over the course of the deal.

“The product transfer advice gap represents a missed opportunity for borrowers.”

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  • Bill keighley 21st December 2018 at 11:47 am

    Some of the product transfers will have been done because brokers and borrowers don’t want to experience the poor service given by the free legal offerings via LMS. If they sorted the service issues out then maybe fewer PTs would be done