ompetition for clients


The intermediary market is extremely resilient and continues to provide a vital means of helping people buy a home or remortgage. While the number of intermediaries in the market has clearly reduced since 2007, the actual percentage of mortgage sales through intermediaries is still around 50% across the industry, down from a norm of 60% pre-2007. Both Halifax and BM Solutions have always been committed to servicing our customers’ needs, ‘helping more people own homes, more easily’, whatever the customers’ route of securing their mortgage. It is important to cater for customers who wish to apply via an intermediary, equally as much as for customers who choose to do so directly from a lender. This can lead to different product being available via different channels, and from time-to-time can mean that product options and pricing may be more or less expensive through a particular channel. This is not new to the industry. Providing customer choice is important. Offering identical


products through all channels in such a large and complex market would not meet the different needs of our intermediary customers. There are many areas of the market where intermediaries service more customers’ needs, particularly in the more complex segments such as new build properties, shared equity and buy-to-let.


Halifax and BM Solutions have a network of national account managers who work closely with our panel of national accounts to strengthen our partnerships. This helps to develop tailor-made products to suit both organisations and for the benefit of our joint customers. These products can be more competitive than those available to direct customers. The premier centre is also widely regarded as providing an excellent service for customers who require a larger mortgage. And the relationship does not end when the product period ends either. Halifax is one of very few lenders that pays a proc fee on product transfers, for example. In the end it is about striking a necessary balance for customers. Ensuring that there are compelling products in the intermediary market is a key part of maintaining that balance.


Phil Rickards, head of sales, BM Solutions


The problem or otherwise of dual pricing needs to be analysed from a consumer perspective. The majority of lenders, intermediaries and their respective trade bodies are failing in proper analysis of this paramount task. There is a real danger of polarisation between lenders and intermediaries, with both having strong business cases, both for and against the practice. From a lender perspective, they are eager to control quality distribution channels with limited lending and are conscious of the need to retain staff, whilst seeking to employ their physical and human resources to the full, provides a compelling argument for pricing direct products more cheaply. But the view of UK intermediaries, reducing in numbers daily from an estimated 55,000 in 2007 to 11,000 in 2011, is equally powerful. There is a clear problem for intermediaries from a survival perspective. There is a problem for lenders from a resource perspective, but respectfully and aimed at both sides - so what? The risk in accepting either of these polar opposites is that the most important stakeholder in the equation, the consumer, the one constant factor supporting both the direct retail mortgage market and the intermediary channel, often gets lost in discussions. Of course, brokers have proved their salt and have adapted their models accordingly and so too have national lenders. The fundamental question has to be does the consumer benefit from the dual pricing exercise? As difficult as it may be for us as a business, we have to agree that dual pricing is good for the UK consumer. The customer deserves competition. They deserve discounts where and when available, particularly in a tough economic climate. The real concern which requires proper independent scrutiny, is whether through the process of differentiation pricing, there are in fact true savings for the client? Whilst they may offer a discount direct through branches, this may not be the most suitable and affordable mortgage. The client may receive a saving but if they went to another provider down the high street, an even greater saving could be made. This cannot be right and there lies the true problem. The issue should not be dual pricing but more dual approaches, with intermediaries providing an advised whole of market service.


Rob Killeen, director,


Capital Fortune sense. Do you want to be a part of the next Bigger Issue? Email nia@thepublishinggroup.co.uk mortgage introDucer NOVEMBER 2011 33


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