Bradford & Bingley is ending its IFA status and moving towards multi-ties in a major reversal of strategy following a wide-ranging review led by new group chief executive Steven Crawshaw.
Just three years after it launched The MarketPlace, heralding B&B's transformation into an independent retailer, the group is tendering multi-tie contracts to “all the usual” potential providers.
When depolarisation regulations are finalised, it will multi-tie for the majority of products, arguing the whole of market proposition is not worth the cost and logistical hassle.
The move, which includes the sell-off of three IFA businesses, represents a significant change in emphasis from former chief executive Christopher Rodrigues who staked much of his strategy on IFA distribution.
Crawshaw, who replaced Rodrigues in March, believes multi-tying will enhance the earning capability of its branches, on which its new strategy will be based, while slashing costs by around £40m.
It is unclear what products will be multi-tied but Crawshaw says a rebalancing of its offering is likely. In general, the branches will offer mortgages manufactured in house and by rival providers but only its own savings products. All wealth and protection products will be manufactured by others.
Crawshaw says: “In essence, we are getting more bang for our buck. We are not making a point about the industry, we are just comfortable with the regulation in terms of our own business. The cost of dealing with so many providers and the amount of plumbing needed is not worth our while.”
Mortgage expert Mark Chilton says: “It is a retrograde step. It will have a strange hybrid in its branches with The MarketPlace being retained so it remains unclear whether it is a distribution business or a lending business. It is rather odd.”