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Bolton says FSA will probe high proc fees

Edeus chief executive Michael Bolton says he expects the FSA to start querying high procuration fees and improve disclosure.

DB Mortgages is offering up to 2.75 per cent for fully packaged business while Advantage is going up to 3 per cent, higher than other lenders such as BM Solutions and Edeus.

Bolton says the FSA will question the size of these fees and also the fact that they do not have to be disclosed if they are paid to a packager rather than direct to a broker.

He says: “The FSA will increasingly question the fee. These 3 per cent fees will have to be disclosed. Just as it is looking at cascade systems, it will look at the difference between automated underwriting and outsourced service fees. It is not transparent.”

DB managing director Bill Dudgeon says: “The fee is about how much value the intermediary offers. We do not have the highest proc fee.”

Advantage managing director Keith Dearling expects the high fees to reduce in future. He says: “We only go up to 3 per cent on some products but it reflects the work that is put in by the intermediary. As technology improves, there will be less work required so fees will go down.”


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