An FSA review of mortgage regulation, scheduled for the third quarter of this year, will examine whether the RDR proposals should cover mortgages.
Newly promoted Stockton, who was previously head of intermediary mortgages at HBOS, says: “I think if we were to start from here, you would pay people on trail. But we are not starting from here, procuration fees are paid up front. The cashflow implications on brokers to move from procuration fees to trail should not be underestimated. You would take everyone out if you were to suddenly change this because of the way people have structured their businesses.”
Stockton, who now manages Cheltenham & Gloucester branches as well as telephone sales for Lloyds, says his role allows him to have sympathy for both sides of the dual-pricing argument. He says: “We spend an awful lot of time looking at dual pricing. It is not an explicit strategy, we look at the competition on the high street and we look at competition in the intermediary sector.”
He says Lloyds looks “extremely carefully” if there is a difference of more than 25 basis points between direct and intermediary. He adds: “Let us not forget that intermediaries have had the benefit of dual pricing for an awful long time. There are instances of dual pricing but at times there are not and advisers should remember that.”
Stockton admits he now manages a lot of intermediary brands, and says this will be reassessed in the future. “We are taking stock and realising what we have. We certainly will not be closing this, that and the other and changing our proposition without an awful lot of thought,” he says.