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Can lenders offer better direct deals with a clear conscience?

In the last few months, I have read many points of view regarding the credit crunch and predictions that it will continue for anywhere between 12 and 36 months, depending on which so-called expert you listen to. Current conditions are making it extremely difficult for us brokers to survive and although diversifying is a good thing, for some it may be a bit late in the day.

Certain high-profile lenders have now made their position clear with regard to their intermediary partners. I am sad to say they are making hay while the sun shines. I have read the disgruntled comments from brokers week after week regarding what direct deals a certain lender has offered.

The thing is there is nothing we can do, so we need to think on our feet. Here are some pointers:

  • Get diversifying ASAP.

  • Work with your client bank.

  • Focus on what products are available to you.

    Of course, this will mean that you will have to stop listening to the news, watching TV, reading newspapers or magazines, going to the shops or reading advertising on boardings, buses, etc. Basically, just do not go out. This way, you will not see, hear or read of any direct deals available.

    So, when you are dealing with your clients, you can honestly say that this is the best deal available via your whole of market sourcing system. Then you can go about your business having a clear conscience and knowing that you are treating customers fairly.

    On the other hand, when the application arrives on the lender’s desk and it knows full well that it has a product that will suit the client’s needs and is anything up to 0.7 per cent cheaper, will it have a clear conscience, will it be putting the client’s interests first and will it be treating the customer fairly?

    It is all well and good for FSA chief executive Hector Saints to say there have always been lenders which have not chosen to put their products through brokers. Hector, we are not talking about those lenders, we are talking about the lenders who have intermediary partners and who are allowing us to place business through them, knowing full well that the consumer can get better deals direct. Maybe these lenders should pull out of the intermediary market altogether. At least that way, we know where we stand.

    We can then deal with the lenders which want to offer the best products directly and through intermediaries and treat customers fairly and ethically.

    I have this feeling that somewhere along the road, sooner rather than later, the word “misselling” is going to rear its ugly head when consumers realise they have been sold a product by a broker that they could have got much cheaper if they had gone direct to the lender.

    Who is going to take the blame for that one? Will it be the broker who would, of course, only be aware of the products on his whole of market sourcing system? Or is the FSA going to do a full circle and put the blame on the lender due to the fact that they knew full well they could have offered a direct deal which could have saved the customers potentially thousands of pounds?

    Interesting times lie ahead.

    Warren Hall
    Dream Financial,
    Dorset

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