The product transfer market represents a huge opportunity for broker firms to grow their business in 2017 and beyond, a panel at FSE Manchester said.
Adrian Moloney, sales director of OneSavings Bank said the product transfer opportunity was “a massive part of the market that brokers haven’t had a part of before”.
And Robb Jupp, chief executive of Brightstar, said: “Product transfers are your big opportunity, both residential and for buy-to-let.
“The way you grow your business is by getting involved in product transfers.
“However, at the moment, the 25bps of ‘poison’ you’re currently getting paid for this retention work is just not enough and it needs to go up to a normal procuration fee level.”
Robert Sinclair (pictured), chief executive of the Association of Mortgage Intermediaries, put the value of product transfers at £100bn per year, which would bring it close to pre-credit crunch levels.
He said: “The big opportunity is how advisers get into this £100bn because at the moment we think that 80% is being done directly by the lenders.”
However he admitted it’s hard to know just how big the market is because the Council of Mortgage Lenders does not provide the information.
Jupp reckoned the intermediary sector’s share of business drops when product transfers are taken into account.
He said: “I saw a presentation from LBG recently which suggested that, with product transfers in the mix, the intermediary/direct share of the market is not 70/30 in the intermediary’s favour but actually more like 54/46.”
Louisa Sedgwick, director of sales of Vida Homeloans, said: “Retention procuration fees and product transfer fees are great.
“However my major fear is that down the road the broker gets cut out of the deal completely when the lender contacts that borrower direct.
“This is therefore a great opportunity to keep managing your client banks really well.”
FSE Manchester is taking place today at The Emirates Old Trafford today.