Alliance and Leicester has held a strong pricing proposition which has probably made it the only big player to have hit its real unpublished targets. However, its procuration fees have deterred brokers as this is not in the customer’s best interest.But we now have a best-buy range that even ticks this box. I am talking about Michael Bolton Memorial range launched a couple of weeks ago by BM Solutions. Despite the large upfront fees, these products represent by far the best value for loans from about 150,000 upwards. So why are other lenders still doing business in this sector which is mainstream intermediary territory? Some might argue that the fees represent a deterrent but if the total cost is lowest for the customer, we should be taking a more holistic approach and recommending that the fee is added but then split into 24 and telling the client to save this amount each month in a high interest account so that on exit from the redemption period, you can repay the fee. The only answer seems to be laziness among brokers, the habit of using the same lender because of well established relationships and per haps the ease of doing business in this way. The issue of value also takes me into another area where I am concerned about sourcing systems. Lenders are rapidly moving to scorecard-integrated afford-ability models which make income mult-iples on which sourcing engines rely ineffective. In today’s world, affordability and higher income multiples are where many brokers find themselves doing most of their business. A real problem is where the lender scores the client as the affordability calculation is performed, thus building up search footprints which may make the next attempt worse and damage the client’s credit profile. A true broking platform would take one credit reference and fire up a number of lenders’ cards online to get the optimum price and affordability mix. But lenders hate this idea and will not cooperate with it. In time, a solution will appear but it’s unlikely to come via the current trading platforms. It is an area that is going to put brokers at risk of retrospective misselling claims, so we are left where we began – what is best advice in today’s world?
Beachcroft Wansbroughs financial services arm will be advising on Standard Life Healthcare on purchase of the PMI business of FirstAssist Insurance Services. The purchase is subject to FSA and court approval and the formal portfolio transfer of the insurance risk to Standard Life Healthcare, which will be completed in the first quarter of 2006.
The Government and unions have reached agreement to reform public sector pensions, with the retirement age for new entrants rising to 65 while current workers continue to retire at 60. The deal was struck at the Public Sector Forum, made up of public sector unions and the Trades Union Congress, and includes a Government guarantee […]
Three out of four brokers say M-Day has made their jobs more difficult and profitability is decreasing, according to Alliance & Leicester. One year into mortgage regulation, brokers are still experiencing frustrations and lower profits, even more so than they reported to be the case 100 days after M-Day. Fifty-eight per cent of brokers are […]
The ABI and Aifa are renewing their defences against claims management firms with new guidance telling members to compensate consumers direct. The trade bodies want to raise awareness that consumers can deal with firms directly for free and do not have to hire claims management firms, which on average will take a quarter of their […]
By Neil Jones, Canada Life Investing through international providers has grown in popularity over recent years as investors seek out the benefits of gross roll-up and the wider range of investment options that can be available. When considering a recommendation for a lump sum investment, not only does the adviser have to select a suitable tax wrapper […]
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Such products should not be off limits for all but record keeping is key
An influential Government committee has written to the FCA outlining its concerns that the regulator’s protection of British Steel Pension Scheme members remains ‘grossly inadequate’. In a 15 December letter to FCA supervision director Megan Butler, work and pensions committee chair Frank Field says it is apparent there are “insufficient protections” in place to prevent […]
The Government will lower the age at which people be auto-enrolled into a workplace pension from 22 to 18 as part of the 2017 review into auto-enrolment. The proposal, due to take effect from the mid-2020s, is part of a package of measures the government wants to introduce to improve the coverage of workplace pensions. […]