Lovey believes even more lenders are now offering better and cheaper products direct.
He says the tide has turned over the last few weeks and says it is now time for intermediaries to declare war against lenders.
Speaking to Money Marketing, Lovey says: “This was happening a bit before but it is even more noticeable now. Lenders are offering better products through branches and are offering options that we can’t offer.”
Dear Richard & Chris,
I was with a lot of people last week and we compared notes about what was going on and the anger everybody feels towards the way that the lenders are treating the intermediary market.
I have to say that since John Malone’s letter it seems to have gone to the lenders’ heads that there is no need now to use the intermediary market, it’s ok if they use the direct route and cut out the intermediary – I am sure you will recall my one word description to that letter with regard to paragraph 11!!
The genie is out of the bottle and the intermediary market is now in free fall – dramatic statement? well only just, but if you only knew what was going on you would know that all of them are now at it offering products so much different direct as they are to the intermediary market.
If AMI do not speak out in the defence of our industry then there will not be much of an intermediary market left in a relatively short space of time. The way the lenders are acting now seems like an old style ‘cartel’ which is not in the interests of the consumer and is not treating customers fairly.
Please do not allow the intermediary market to burn and just watch! Think of the livelihoods of those intermediaries already at risk without lenders rubbing our noses in it.
Please speak out loudly and clearly that the lenders are deliberately destroying the intermediary market either by design or not and use your influence with the lenders to stop the destruction of the intermediary market, which the allege they need and work in genuine partnership with us or the alternative is they will have to reopen all their branches again and staff them!!
Not want they want to do we know, they currently want it both ways and are acting in a most short sighted and selfish way.
I feel so strongly that AMI must speak up for the people it represents, not next week or next month, but today!
Best wishes to you both and please do not take my letter personally as I have the up most respect for you both and I also appreciate this puts you on the spot which is not what I would, or would wish to do except in the most extreme of circumstances – for which this is.
Sole trader, The Mortgage Practitioner
Totally agree with this broker’s points of view and back him 100% with his views and comments!!!!!!!!!!!
“Professional Financial Planning Ltd
Problem is we have no trade union, nobody who can speak up for us, we can’t go on strike – in other words we are completely powerless.
It would be nice to think that we have long memories and when the worm turns as it surely will we will remember those lenders who have suddenly decided
that they do not need intermediaries any more. If only there was some way in which we could organise a boycott of certain lenders I would certainly be
all for it. The way that certain well known lenders have acted towards intermediaries recently is downright disgusting – we all appreciate the
problems that they have experienced and certainly they do not need to hide behind the skirts of John Malone or for him to hold their hands.
Yes – we all appreciate the problems that lenders have been going through – but the war that is going on between them to avoid being the most competitive at any time is infantile. We know that they need on occasions to withdraw products at short notice, or no notice at all as is now the norm, and just the faintest hint that they have just a little understanding of the problems this is causing intermediaries would go a long way. Indeed
there are some lenders who make changes to their products and don’t even bother to tell their brokers any more – we have to find out from the press!
It is most apparent that there is an urgent need for certain decision makers at lenders to get to grips with reality as far as intermediary lending is
concerned. They could make a start by telling their brokers how they suggest they deal with a client who, after lengthy research is sent a suitable product which has just been introduced by a lender, and then have to tell the client within hours that the product has been withdrawn without notice.
The cavalier attitude with which certain lenders are treating intermediaries is absolutely deplorable. Many have now started offering products through
branches which are not available to intermediaries – these same intermediaries to whom they have been sending their BDM’s in the past to plead for business.
WE must face the fact that we are completely powerless as advisors as things stand. We have no-one on our side. Trade bodies like AMI should be
vigorously challenging lenders, but they have no clout whatever with lenders.
We can rant and fume as much as we like but as things stand we can do nothing – and that’s a pity.
The lenders can walk all over us and they know it. They know that when things get back to normal we will come running – the fact that we have been
treated unfairly by lenders is hardly a reason for not offering products to our clients if they are the most suitable.
So what do we do? Grit our teeth and hope? Moan and groan to anyone who will listen? Get a BDM to call if the lender still has one?
We have been constantly told in the past that most lenders rely on and/or are dependent on intermediary business. So now they don’t need us and are
making life extremely difficult for us.
There must be an answer – if we have this apparent power how can we best use it? Let’s hope we can at least get a little help and advice from those who
should be representing our interests – and I don’t exclude the FSA from this observation.
Inter City Finance Limited.
Danny Lovey’s comments reflect my own feelings exactly, see letter this week in Mortgage Stratergy. The lenders are forcing potential clients away from us. These are generally clients who are too busy to take time out to trawl the market or find time during the working day to visit a town centre lender’s office and hope that they are going to be given the right advice. Alternatively their circumstances may be outside the norm and they require more specialist broker advice to find a product. In effect these clients are now being discriminated against as, by coming to a broker for this advice, the lender will now penalise them with higher rates, this cannot fall within TCF guidelines. Surely it is now time for the AMI and brokers, generally, to take this up with the FSA, who , I feel, should have addressed this issue from the start.
I cannot stress enough my support regarding the open letter. The lenders are turning to their branches for increased business as they do not want to suffer the embarrassment of closures due to the credit crunch. The branches must be supported and sadly it is at the expense of the broker. I would like to see a national show of strength with certain lenders boycotted until they level our playing field and recognise our true value within the mortgage and investment industry. Now has never been a more appropriate time to be heard as one voice.
Romilly Associates IFA Ltd