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Nationwide pays retention clients £250 but snubs proc fees

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Nationwide pays retention customers £250 but still does not pay brokers procuration fees for retention business, it has emerged.

The lender is sending letters to existing customers approaching the end of their term, which offer “£250 cashback for keeping your mortgage with us”.

The letters, seen by Mortgage Strategy, also promote the lender’s switcher deal range.

A Nationwide spokeswoman says: “Since July 2016, we have offered £250 cashback to thank members for staying with us when they decide to take out new borrowing. In addition, we broadened our offer and extended the 0.10 per cent loyalty discount to existing customers moving home and taking a new product too, which is also available through the broker channel.”

But the lender has no plans to introduce proc fees.

The spokeswoman says: “We have procuration fees constantly under review, but have no plans to change our current model at this time.”

But brokers say they were not informed of the customer offer and expressed frustration with the lender.

London Money director Martin Stewart says: “I fundamentally think that’s bad practice by Nationwide.

“We give lenders 75 per cent of their business. If we had a client that gave London Money 75 per cent of our business, I would look after that client.

“I’m not comfortable with the fact that we do the hard work to introduce a client to them in good faith, then they try to retain that client from us. That’s not fair.”

Your Mortgage Decisions director Dominik Lipnicki says: “If we are scouring the market, we deserve the reward. For brokers that don’t charge brokerage fees, then proc fees are what they survive on. So I find this strange by Nationwide.

“If they are willing to pay £250 to retain the client, then they can pay a broker that £250 too.”

A broker, who wishes to remain anonymous, says: “You would wonder why they can’t pay a broker for retention business on a similar basis?”

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  • Vincent Egan 22nd September 2016 at 5:16 pm

    If just seems so short sighted and narrow. This coming out feels like they are flicking the V’s at us!

  • Poacher 22nd September 2016 at 5:14 pm

    Why all the out cry ! NW and many others play this ‘partnership’ game but if they could do without brokers they would….they are not going to you pay twice ! Santander don’t and they now have a 30 min remo solution what this space as they all move that way . Sell more protection, that will keep you busy and best serve your clients

  • Derek Frost 22nd September 2016 at 4:35 pm

    ‘Cynical’ is the only appropriate term to apply to this misguided strategy! Nationwide aren’t exactly sitting at the top of the pile regarding most attractive rate/product offerings at present, so I urge all of my peers to bear that in mond from today on!

  • Samantha Cox 22nd September 2016 at 4:32 pm

    The danger of offering an incentive, with no additional advice or review, is that a client then gets lumbered with a deal they later need to change, and £250 won’t go far towards redemption penalties.
    I’ll often advise a client to return to their existing provider but in some cases its not best advice, and by doing this Nationwide are ‘confusing’ vulnerable, customers who have maybe not have thought through the implications of locking in for another 2,3,5 years, unless Nationwide are offering a fully advised service in addition to the £250? I doubt it though. I consistently find that at a 2 or 3 or even 5 year review so much has happened in my clients lives and ‘everything’ has to be re-considered to take into account current and future needs. So i think any lender offering such an incentive needs to be very careful………..

  • Bob Hawkins 22nd September 2016 at 4:31 pm

    That is not withstanding the ‘benefit’ of transferring the compliance responsibility to us!

  • Simon Wilkinson 22nd September 2016 at 4:22 pm

    Nationwide’s stance is arrogant and short sighted. No respect to the Broker who introduces the borrower. Metro and Virgin are both relatively new at offering brokers product transfers and Barclays and Halifax have long been doing so. Nationwide will find that business volumes will diminish through the intermediary channel unless they follow suit

  • Chris Hulme 22nd September 2016 at 3:46 pm

    For a lender that claims up front to be intermediary focused, their actions certainly don’t back it up. That is a strange move indeed.
    As a wide point on retention proc fees across the board, the downside is that once brokers have factored in the additional fees they would need to charge to cover the lack of proc fees from such lenders, it could well be cheaper for a client to switch lender than stay with the existing lender.

  • John Yerou 22nd September 2016 at 3:39 pm

    This is very disappointing. We also submit huge volumes of our business to Nationwide and are disappointed they have taken this position. Retention proc fee has been under review for too long and brokers are getting frustrated with this. Nationwide needs to look at what Halifax, Virgin, Barclays and Clydesdale are doing. They really value you the intermediary market and back it up!