News Analysis: ‘Keep your clients close or lose out on product transfers’

Brokers need to be on their guard against lenders looking to cut them out of the product transfer market in the near future, experts have warned.
Over the past couple of years many lenders have started paying intermediaries retention proc fees on product transfers, but some believe the tide will soon turn as banks and building societies look to save money on commission by encouraging clients to deal with them directly.
Advisers report that lenders are contacting clients earlier and earlier with product transfer offers – sometimes up to seven months before their existing deal comes to an end.
Impact Specialist Finance managing director Dale Jannels says: “The intermediary market is 73-74 per cent of the overall mortgage sector and it has been quite a new thing for lenders to pay retention proc fees over the past couple of years. At some point lenders will have the power to take that away.
“Whereas at the moment they are paying proc fees, maybe in a couple of years’ time they may well have the technology and resources to take it back entirely. A lot of brokers think the intermediary market is going to keep growing, but I don’t think it will.”
Jannels warns that not only are lenders contacting clients earlier, but some are using language that he finds concerning. “We are also seeing lenders offering a rate and saying that after two or three weeks they cannot guarantee that rate will still be available,” he says.
“They are wording it in such a way that the client is seeing it as a deadline. So customers are taking up that deadline six or seven months before their deal ends and before the broker has even been in contact with them.”
Jannels urges brokers to maintain a close relationship with clients and keep in regular contact or risk losing business, particularly where five-year deals have been recommended and there are fewer opportunities to remortgage.
The Mortgage Mum founder Sarah Tucker agrees. She says: “It is becoming a race as lenders are writing to clients ever sooner. Brokers need to be really on the ball and develop that ongoing relationship with the client.”
KB Mortgage Services founder Kate Burns says: “Lenders may offer a lower rate, but it may not be the lowest in the market.”
The post News Analysis: ‘Keep your clients close or lose out on product transfers’ appeared first on Mortgage Strategy .

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