FSE 2013: FCA must guide lenders on rewarding quality
Speaking at the Financial Services Expo 2013 Cupis, part of the opening broker panel line up, described the current approach as a “mish mash”.
He said: “The principle of rewarding brokers for the quality of their work is sound but the issue is that lenders have different views of what quality is.”
Before the final version of the Mortgage Market Review was drawn up lenders were asked to take part in a number of thematic reviews around getting to know your broker and the quality of that business.
But Cupis said he did not think lenders have answered that question in a consistent enough way which means they can price their procuration fees for quality and the regulator should provide more guidance to create a level playing field.
Mark Graves, head of network at Pink, agreed that further guidance was required.
He said: “We need a charter of what good looks like.”
Opinions are divided over whether using proc fees as a lever to improve quality is an effective method.
In yesterday’s lender panel debate at FSE both Alan Cleary, managing director of Precise, and Ian Andrew, head of intermediary sales at Nationwide, questioned the effectiveness of lowering proc fees as a result of poor quality with Cleary confirming Precise would not follow other lenders down this route.
And the broker audience shared this sentiment with one audience member stating that a procuration fee was a reward for procuring the business for the lender which they would otherwise not have obtained and should not be used as stick to beat the broker with.