Intermediaries were held up as being primarily culpable for the maladvice associated with, and poor performance of, certain mortgage assets. It took some defiant and courageous remarks from PMS’s John Malone at the CML to redress the balance.
Regrettably, self-preservation among the ruling classes will continue to be the norm until what is now a pretty pointless exercise of blaming everyone else runs its course. What is more relevant now and in the future is how the role of the intermediary might change as a conseq-uence of the market disconnect and in recent weeks there have actually been some reasons to be cheerful.
The first was NatWest’s own goal via its MoneySense advisers. When I first saw the cheesy TV adverts I cringed but did so with some enthusiasm because I could not see how they could pass muster or avoid charges of being misleading and untransparent. Intermediaries will not have lost any stock as a result.
Second, we had Michael Geoghegan, who said last week that operating a nationwide branch network was tough going. You’re not kidding. And this from an organisation that has repeatedly refused to deal with intermediaries. The chief executive’s remarks come hot on the heels of the HSBC’s pilot scheme with John Charcol which, by all accounts, has got off to a good start and may prove to be the point on the road to Damascus that HSBC was felled from its horse and saw the light at last. Charcol succeeding in this project has collateral benefits for us all.
Third, the Association of Mortgage Intermediaries’ view on dual pricing, which I concur with completely, that we need to be careful about what we wish for. Intermediaries have prospered under a dual pricing regime for decades. If you outlaw it you also remove any argument for intermediaries to be treated differently by lenders and to continue to work with them on product innov- ation when the market resuscitates.
For so long as most lenders engage in meaningful branch distribution, the better intermediaries compare. Let’s face it, many of the direct sector’s brightest talents ultimately move across to the intermediary ranks in search of better pay and more challenging career dynamics.
What’s more, there are two overriding reasons why the intermediary share of the market may begin to increase shortly. First, any sustained resurgence in first-time buyer activity plays to the business models of huge estate agency-centric businesses like Countrywide and indeed the majority of broker businesses which are an integral part of this food chain. More tellingly, as lenders such as Abbey and Lloyds lead the charge towards incentivising brokers to cross-sell related products, the proven sales skills of intermediaries will easily outperform the direct channel.
Certain intermediaries did need muting and culling but overall the talent pool is still stronger and even lenders will admit that once the workflow picks up, we will get the winning share of this.
Kevin Duffy is managing director of Mortgageforce