Sesame's new mortgage offering has come in for heavy criticism from some of its leading rivals.
The company allows brokers to choose between Mortgage Select, with a small panel of lenders and higher procuration fees, and Mortgage Market, which covers every lender in the market but the deal is believed by some not to be in the best interests of consumers.
Charcol senior technical manager Ray Boulger says from a consumer perspective, the deal is not very attractive as Sesame is saying it will either offer a deal which is best for the broker with higher procuration fees or one that is best for the consumer with more deals.
Boulger says: “The concept is somewhat questionable and does not fit in very well with the spirit of what the FSA is trying to achieve, even if it meets the letter.”
Premier Mortgage Service managing director John Malone says IFAs are looking for a true whole-of-market product range and this should not be driven by higher procuration fees from a few lenders.
Malone says: “I think this is against what the regulator is looking for.”
Mortgage Intelligence managing director Sally Laker considers the offer will not be attractive to mortgage brokers who do not want to be restricted to a small panel of lenders.
But Sesame says it is in the consumer's interest for the adviser to get paid well, as they are more likely to work hard for the client.
Commercial director Martin Davis says: “An adviser is looking for the best deal for the client. If he can do this and get more commission, then he will. Our internal processes will not allow advisers just to recommend a product because of commission – they have to demonstrate they have been through every stage of advice.”