The Power Hour
MBE 2012: Power Hour: Know your broker
There is a seachange going on in the mortgage market behind closed doors. It’s been prompted by the FSA demanding lenders know their distributors better and its impact could shift the intermediary market significantly. Our panel discuss
NATWEST FOR
INTERMEDIARIES RECENTLY DECIDED TO DEAL WITH A LIMITED NUMBER OF LARGER DISTRIBUTORS. ING ALREADY OPERATES A LIMITED DISTRIBUTION. WHY?
Nigel Stockton: Lenders like to have a modicum of control and generally it suits them to deal with few, larger well capitalised distributors. That said these nearly always include Legal & General and Sesame PMS who run the largest directly authorised distribution so it’s not penal. For some lenders maybe like ING this is a way of controlling volume which
in turn is a way of tranche managing capital. Let’s be honest, lenders like Nationwide and Virgin Money make a virtue of the fact they deal with everyone. It’s also difficult to see how Lloyds Banking Group and Santander would achieve over £15bn of total lending per annum without covering the vast majority of the market so I expect it to remain pretty egalitarian.
BUT LENDERS HAVE BEEN LIMITING THEIR DISTRIBUTION BEHIND CLOSED DOORS. SOMETIMES IT’S THROUGH DUAL PRICING AND SOMETIMES IT’S BY
LIMITING INTERMEDIARY FUNDS WHICH A CLIENT CAN GET ACCESS TO THROUGH A BRANCH. IS THAT HAPPENING MORE ACROSS THE MARKET? Lea Karasavvas: I think it is to a certain extent. The dual pricing with NatWest is unbelievable at the moment between the direct deals and what we’re able to offer. The difference with the Woolwich situation is that I’m going out there and recommending it to clients but as soon as you go to book it online then you can’t so they end up going direct to branch. So all you’re doing is selling the product to them and not receiving any benefit for it. We’re effectively advertising
34 MORTGAGE INTRODUCER APRIL 2012
www.mortgageintroducer.com
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