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High-street giants rule out move to quality-based proc fees

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Royal Bank of Scotland, Virgin Money, Nationwide Building Society and Barclays have all ruled out linking mortgage procuration fees to case quality following Lloyds Banking Group’s admission that it is considering this approach.

This week, Moneymarketing.co.uk revealed Lloyds is considering linking proc fees to business quality although it has “no immediate plans” to switch to this structure.

Abbey for Intermediaries switched to this approach in July. It now pays its key accounts between 0.35 per cent and 0.4 per cent depending on the quality of business it receives from brokers, which is judged on the packaging of cases, the conversion rate of applications to offers and the overall quality of submissions. Directly authorised brokers get a flat payment of 33 basis points.

Nationwide, Barclays and Virgin Money say they review their proc fees on a regular basis, but have no plans to change their structure.

Nationwide group intermediary sales managing director Ian Andrew says: “We keep proc fees constantly under review but we have no immediate plans to make any changes.”

A Barclays spokeswoman says: “We constantly review procuration fee payments to ensure they are appropriate, relevant and competitive but we have no current plans to change them.”

An RBS spokesman says: “We have no immediate plans to change the way we pay proc fees.”

Chadney Bulgin mortgages partner Jonathan Clark says: “After Abbey it is inevitable others will look at this. If Lloyds is serious about this, we need to know exactly how it would measure quality.”

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