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Abbey begins trial of current account mortgage switcher

Abbey has begun a pilot scheme whereby borrowers are able to switch to a preferential mortgage if they move to an Abbey current account.

The pilot was launch on July 3 and will run indefinitely, depending on its success. Abbey says borrowers who take up this option will benefit from either a preferential rate of interest or a reduction in the booking fee depending on which mortgage product they take out.

The trial, which is initially being run through a small collection of intermediaries, is part of an initiative that was discussed at Abbey’s Key Account Conference in Ascot earlier this year.

An Abbey for Intermediaries spokesman says: “The ‘switcher’ product range pilot will offer preferential mortgage products for customers who are willing to either switch their existing main personal bank account to Abbey or to those who already have an existing Abbey account.

“The goal of the pilot is to see what appetite there is in the intermediary channel to use current accounts as a cross-selling tool. While this pilot is still in its infancy we are hoping that intermediaries will find the new products a valuable addition to their arsenal, while at the same time allowing us to reward our customers for their loyalty.”

London & Country trialled the Abbey scheme last May and says it was a success.

L&C mortgage adviser David Hollingworth says: “We found that customers were happy to switch current accounts if it meant a benefit to their mortgage.”

Hollingworth says advisers are likely to see other lenders offering deals which bundle together products like mortgages and current accounts.

He says: “HSBC offer preferential rates if you chose to open a paying current account already, but lenders will generally be looking for as much value as you can get from lending.

“Advisers will not have a problem with the idea as long as there is something in it for the customer. Demanding compulsory current accounts to access mortgages just won’t work.”


Dennis Hall

Dennis Hall is one of the few IFAs who is genuinely unconcerned about the retail distribution review. The managing director of Yellowtail Financial Planning is in the enviable position of having made the switch to fees several years ago. Yellowtail does not derive any income from trail commission or generate any income from assets under advice. Income for the firm is all derived from the advice billed in any given year.


A good bundle or a bad switch?

This week Abbey for Intermediaries began trials of its ‘switcher’ scheme whereby advisers can secure a preferential mortgage rate by signing up their clients to an Abbey current account.

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