Your Views: Why should proc fees for new and existing customers differ?

Why should proc fees differ between new and existing clients?

It is stating the obvious but most people, if carrying out work of a non-voluntary kind, expect to be paid for it.

From the perspective of a mortgage adviser, if you carried out work for a client – going through the process, making your recommendation and having that case completed with a lender – you would expect a proc fee. But with many lenders that is not the case when placing that client back with them on a retention deal. In fact, the number is so small that news of Cambridge Building Society now paying such fees made headlines recently.

So a thumbs-up to the Cambridge, which is not the biggest lender around, and a thumbs-up also to the Skipton, which has committed to running a pilot scheme for retention fee payments.

This debate all seems rather odd in the post-MMR world. Why should there be any difference between placing with a new or existing lender? The process has to be the same, the compliance levels required are the same, the work involved is the same, and yet the reward is different.

Lenders can be forgiven for not having historically developed the systems to make such payments – but my sympathy stops there. If I asked lenders to work voluntarily for one day of every month indefinitely, they would think I had lost the plot.

In years to come, I hope this state of affairs is seen as an anomaly – a throw-back to times past. And I hope all lenders will now move to change their policies to pay a retention fee whenever it is required.

Bob Hunt, Paradigm Mortgage Services

Still some broker apathy over insurance sales

After the upheaval of the MMR in 2014, we are now heading towards more regulatory change with the introduction of the Mortgage Credit Directive in March this year. So I am sure all brokers recently asked Santa for a bit of regulatory breathing space once the MCD is in play.

Having been in this market for many years, I have seen mortgage brokers respond to change admirably. I am certain they will cope with the new systems and processes dictated by MCD regulation with the same resilience.

But I have one concern, which relates to their ability to focus on insurance.

I have been very vocal about the fact that the success of the protection market – and indeed the safety of consumers – is heavily reliant on brokers and their ability, and willingness, to sell protection products. There are many fantastic intermediaries in the market who understand the value of offering good protection products – not just for consumers seeking quality cover but also for their own businesses and income streams.

But there is still an element of apathy among some brokers, many of whom are losing valuable custom by not bothering to explore protection as an extra income stream. I worry that, with further regulatory change to deal with, those brokers who perhaps offer protection but not with any gusto will decide to ignore this side of their business as they focus all of their efforts on getting to grips with MCD rules and things like embracing second charge loans.

Of course, it is vital that brokers meet regulatory requirements and I understand that this may take a little time and effort. But by neglecting their customers’ insurance needs, and thereby neglecting a viable income stream too, they risk both falling foul of the regulator from a TCF point of view and damaging their business.

Jason Berry, Uinsure

Doubling of broker levy is unfair and unhelpful

Recently, Mortgage Strategy reported that the FSCS was set to double the mortgage broker levy. That is just what the remaining 8,000-9,000 mortgage brokers wanted to hear – an increase in their levy to cover the claims that come from a time when the broker population used to be far larger.

Bearing in mind that those who remain are the cream of the crop, they are at far less risk of having any advice issues than those who have already hung up their qualifications and left for good.

Overall, this makes good mortgage advice more expensive for those who need it and takes it out of reach from people who can only just afford it at present. Where should they go now? The MAS?

Chris Hulme, Clayton Hulme