View more on these topics

Lenders are undermining advisers – but only for a few more weeks

Here we go again.

Not satisfied with being responsible for the lending policies of the past that can be directly attributed to the current credit crunch, lenders are now cutting out of the market their biggest source of business – yep, that’s right the mortgage adviser/IFA, while producing around 70 per cent of all lenders’ business, is now being treated like some sort of leper by the financial institutions.

I refer, of course, to the fact, that lending institutions are offering different mortgage deals that are more competitive direct to clients.

To add insult to injury, it was the adviser that introduced the client to the lender in the first place.

The example below amply demonstrates the point.

We have recently carried out research for a longstanding client, who we introduced to the lender two years ago for a remortgage. Our time was spent, creating an up-to-date fact-find, producing a KFI, writing the suitability letter and helping the client to complete their application form, enabling them to proceed with our recommendation, a remortgage with an alternative lender at 5.89 per cent with a £995 fee.

However, the existing lender rang the clients direct and offered out clients an exclusive – no intermediaries allowed – 5.75 per cent rate with a fee of £599.

We have been undercut again. We cannot offer anything near this rate from the choice of products offered to intermediaries by the existing lender.

We have approached the lender to ascertain the reason why they felt the need to undercut us, we have been advised “it is only for a few more weeks”.

As we package each case and hand the lenders the business on a plate, when did the adviser become the enemy to lenders and what have we done to deserve it.

A bottle of champagne for the first reader to correctly identify the lender.

Paul Simpson
Managing director Wellington Financial Management


Known quantity

The turbulence in the mortgage market has been very much about the known unknowns – what is the real liability of the banks to debt instruments?, how many mortgage holders are finding difficulty servicing their debts?, how many will find their repayment commitments a strain? Until we know the truth on these issues, much of the rest remains speculation.

Private lessons

I am a private investor about to start a new portfolio. My golf club pals have told me that there are many pitfalls to watch out for. What in particular should I be aware of?

Who cares?

By Tracey Dickson, marketing consultant There are almost 7 million carers in the UK – that’s around 10 per cent of the population who provide unpaid care for a disabled, seriously ill or older loved one.1 But according to a report from the charity Carers UK, 20 per cent of people providing 50 hours or more of care […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm