JLM Mortgage Services has questioned whether the time is now right for lenders to enter into a formal client contract agreement to ensure advisers are not cut out of the process.
Intermediary distribution is now delivering over 80% of all mortgage business to lenders, and JLM argues that there needs to be a formal agreement in place so lenders highlight the original adviser to the client.
This, JLM says, encourages lenders to secure ongoing advice and the protection it affords them.
Sebastian Murphy, head of mortgage finance at JLM Mortgage Services, said: “Instead of potentially going head to head with the adviser for repeat business, we are suggesting a much more collaborative approach, one which fully recognises the source of the initial business – the adviser – and seeks to keep them, and the provision of advice, at the heart of the relationship.”
Rory Joseph, director of JLM Mortgage Services, added: “If clients do not wish to return to the original adviser that placed the business then that is clearly their choice and they are well within their rights to go direct to the lender or use another intermediary.
“However, we would like to see that choice presented up-front to them by the lender, and one way they can do this is informing both the client and adviser about upcoming renewal opportunities and showing a clear route-map back to the original adviser.
“We believe that it is the distribution sector – particularly the larger network and mortgage club players – that are in the strongest position to drive the introduction of such a formal agreement forward. “
This comes as JLM suggests a number of lenders are increasingly attempting to remove adviser influence by contacting clients up to six months before their deal ends, offering direct-only products via a tick-box format, waiving early redemption charges and providing other incentives.
JLM is calling on the network, mortgage club and distributor community in particular to take the lead in delivering such an agreement.