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E-loan is predicting the dawn of a fee-based IFA market. The online execution-only mortgage provider has its thumbs in a lot of pies globally but in the UK it believes it is offering an information service which will push customers to seek “truly independent” advice. But will the cultural and logistical obstacles in the path stop the international brand&#39s masterplan for world domination?

E-loan launched in the UK at the end of January. The UK operation is half-owned by the original US operation, with the same relationship applying to E-loan arms in Japan, Australia and New Zealand.

The ultimate aim of the brand is to sell mortgages through a unified global operation although, for the time being, each local operation deals autonomously.

E-Loan has entered into strategic alliances with Halifax&#39s Intelligent Finance, the CGU-backed home-finding service Asserta and has relationships with 50, and rising, UK lenders on its panel.

One of the most interesting developments in the coming years will be euro mortgages across European Union member states but the continu-ing wait for legally accepted digital signatures, coupledwith the level of handholdingneeded by UK consumers buying on the net, looks set tohamper progress in this area.

By linking up with E-loan, traditional lenders can ride the internet wave on the coat-tails of an established online player and pick up some tips for their own e-commerce offerings along the way.

What E-loan gains, in addition to its procuration fee, is fundamental to its core proposition of providing independent, comparative information on an extensive range of the mortgage products.

Chief executive Andrew Armishaw says: “We are working with key lenders to produce a more streamlined and simplified process by using decision trees, among other developments. Lenders know they sit in a competitive marketplace and through E-loan they can see how they rate within that market.”

First Active director of marketing Ian Giles says: “We are on the lender panel and for us it is definitely a mutual learning exercise. We are the product specialists and they are the distribution channel.It is a very positive experi-ence of sharing information for all lenders because E-loanworks as a true infomediary which knows what all the lenders are doing and passes this on to consumers.”

E-loan aims to offer the biggest choice of lenders, online applications and direct comparisons between products on a short list which establishes which products best meet customers&#39 criteria.

A company statement says: “Customer-focused assistance agents and human guidance are available from initial site contact to completion ,via a dedicated call centre and packaging unit.”

Armishaw says: “Increasingly, services like ours will do a lot of what IFAs are doing directly with the customer. Customers will be able to find out about what product is right for them very easily online.

“What we will see is that professional advice is not about explaining products. It is about giving people genuine advice about the suite of products commonly sold around mortgages.”

Armishaw also believes the impact of players such asE-loan will send IFAs further down the fee-charging route.

He says: “The whole point of independent financial advice is that it is just that, inde-pendent, which means itmust be fee-based and not reliant on commission.”

In terms of market share,E-loan is ambitious. It wantsto see the proportion of mortgages sold online to account for 20 per cent of the market within the next few years and for it to take 25 per cent of that cut.

Currently, just 2 per cent of mortgages are sold on the internet, according to E-loan.

The company knows its biggest competitors are not the likes of The Exchange but rather the traditional ways of buying a mortgage. It says it is already addressing some of the cultural barriers to online mortgages with its call centre because”people like to have the reassurance of human interaction”.

What is the brokers&#39 verdict on E-loan? Riach Independent Financial Advisers proprietor Bob Riach is cynical. He says: “I get 30 enquiries a weekfrom iii&#39s internet adviser. Often, people have done their research but will not take the next important step beforehaving a face-to-face meeting.

“The other danger is that consumers will take the site&#39s best-buy suggestions and go direct to the provider because the process of going through forms and chasing applications is so time-consuming. E-loan won&#39t ever get the market share it wants but it will provide another research tool for customers to use before going to an adviser for their opinion.”


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