View more on these topics

Proc fees may be replaced by fees for advice, says IMLA

Intermediary remuneration may become more based on fees for advice than procuration fees in the future, the Intermediary Mortgage Lenders Association has said.

In a market statement today, IMLA says it thinks the market may see a shift in the reward structure with procuration fees playing a less prominent role and fees for advice becoming more important, with ever more emphasis upon high quality standards.

Executive director Peter Williams says: “Given the growing dominance of the intermediary channel over recent years – with over 80 per cent of mortgages introduced via brokers in the first quarter of 2008 – intermediary based sales are certain to return strongly, not least because of the benefit to consumers of providing a wider range of choice and enabling customers to choose based on high quality independent advice.

IMLA stresses that differential pricing and product availability between the intermediary and direct channels are facts of life and in no way reflect a desire on the part of lenders to undermine the role of intermediaries.

Williams says: “This has always been a feature of the market and brokers in the past have benefited from it. The tensions are much more evident now with a reduced market. Shifting distribution to branches is not the cause of the problem but a symptom of the smaller market.

“Similarly, situations where lenders are compelled to reprice or withdraw products at relatively short notice are a market imperative in an environment of scarce product availability where demand often outstrips supply by a significant multiple. Lenders do their very best to co-operate with intermediaries to help them support their customers.”

IMLA says it will continue to work closely with AMI and that a number of IMLA members continue to provide financial support to AMI in recognition of this long term commitment.

Recommended

C&G appoints Farley in top broker role

Cheltenham & Gloucester has appointed Jon Farley as intermediary sales director. He joins from Barclays where he was regional sales and service director at its premier banking division.

The B&B saga continues

The last two weeks has seen the saga of Bradford & Bingley reach new heights. News emerged today that US investment group Texas Pacific Group has withdrawn its £179m cash injection for the firm after learning that ratings agency Moody’s is to downgrade the bank once again.

Turner’s challenge

As Adair Turner takes over as chairman of the FSA, is he fully aware of the extent of the role he has taken on? Most of the outstanding jobs are only halfway through and a great deal more needs to be done, otherwise the FSA’s effectiveness will diminish.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com