Network calls for deals to stop lenders cutting out brokers

hand, shake

Network JLM Mortgage Services is urging lenders to stop cutting out brokers by contacting clients directly. 

JLM suggests lenders should enter formal client contact agreements to set rules around behaviour including cross-selling and renewing mortgages without advice. 

The network says these should highlight the original adviser to the client and encourage them to get ongoing advice. 

JLM says it wants to see lenders give client information and details to the adviser before any product renewal. 

The network says that “a number of lenders are increasingly attempting to remove adviser influence by contacting clients up to six months before their deal ends, offering direct-only products via a tick-box format, waiving early redemption charges, and providing other incentives”. 

The firm adds that lenders often do not make it clear that advice is not provided with direct contact. 

JLM is calling on networks, mortgage clubs and distributors to press lenders on the topic. 

JLM head of mortgage finance Sebastian Murphy says: “In our view it’s time to put to bed the age-old argument about who ‘owns’ the client, not least because the vast majority of lenders now receive the vast majority of their business via the intermediary channel. 

“Instead of potentially going head to head with the adviser for repeat business, we are suggesting a much more collaborative approach, one which fully recognises the source of the initial business – the adviser – and seeks to keep them, and the provision of advice, at the heart of the relationship.” 

JLM director Rory Joseph adds that clients are free to go direct if they wish, but that the choice to use brokers should be clearer. 

 

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