Lenders need to begin acknowledging the greater level of work involved in placing mortgage cases today and should be paying a procuration fee commensurate with that increased workload.
That was the view of John Coffield of Paradigm Mortgage Services, who was speaking at a panel debate at today’s Financial Services Expo Wales.
Coffield said that while it would be right for advisers to expect a larger procuration fee for the work required, he wasn’t convinced the industry would get to that point anytime soon. He was particularly scathing about those lenders who are yet to pay retention proc fees.
He said: “Some lenders have announced they intend to pay retention proc fees in the summer, or later in the year, simply because they do not want to be ‘last man standing’ in terms of announcements.
“While I don’t think there should be a one size fits all approach when it comes to proc fees, some lenders are still paying the same fee they did pre-MMR.”
Adrian Scoutes of Nationwide – a lender that has yet to start paying retention proc fees – said: “We are saying we’ll be paying from the summer and we’re sticking to that. Currently we’re in testing mode.”
The panel also looked at the potential threat to advisers from digital propositions or self-styled ‘robo-advice’ offerings.
Coffield said: “This could be a potential threat but as with all new things that come along, it’s how advisers work with it. I still believe people want to deal with people when it comes to complex financial matters like a mortgage.
“Do you want to do a transaction of £250k on your mobile phone?
“I doubt that most people would. Advisers do however need to look at the platforms and see if they can integrate them into their businesses. I don’t think robo-advice will take over from advisers but it will take over those brokers who don’t embrace change.”
Ian Carswell of BM Solutions agreed: “Most people that go on that technology journey at some point come off that path in order to talk to a human being. I don’t think it’s therefore as threatening as we all might think.”
FSE Wales was held today at Celtic Manor Resort, near Newport, South Wales.