The latest advertising campaign from Northern Rock aimed at intermediaries says “We listen to you” and “No dual-pricing”. This followed the campaign from Platform in September 2009, which gave seven pledges, including no dual-pricing and a commitment to listening to IFAs.
This at a time when Coventry Building Society was awarded best overall lender at the recent PTFS provider awards. Coventry is an organisation that has come through recession, continued to add value for its members, delivered improved profitability and yet has remained firm in its commitment to the intermediary.
So while there is concern in the market that many of the big players are gearing up to support their retail operations, is this a model with limited appeal? Well, maybe in terms of hard commitment through pledges or even advertising in support of the intermediary sector but there are examples of lenders who are showing their support regardless. The obvious examples, without preferential pricing through their retail branches, are Woolwich and Nationwide.
The question is why, when bank retail sectors continue to pile on the pressure to take a greater proportion of the market? We know these lenders would point to the likes of HSBC and the Post Office as direct-only lenders they have to compete against but I think it comes down to the endconsumer. That most consumers want and need independent advice when making a significant financial commitment was revealed by research from the Association of Mortgage Intermediaries last year, showing that consumers place higher levels of trust in intermediaries compared with the banks. Finally, if consumers did not want independent financial advice, why would Which? be setting up a brokerage based on member demand?
The intermediary market has gone through significant pressure and consolidation, which has further to go. However, we can take comfort from the support the consumer is giving our sector and, more important, the value we give back to the consumer. The wise lenders are all too aware of how working with the intermediary sector will result in distribution, margin and profit.
Dev Malle is sales and marketing director at Personal Touch Financial Services