Virgin Direct is in talks with the Council of Mortgage Lenders about joining the trade association and signing up to the Mortgage Code.
Scott Mowbry, spokesman for Virgin’s One account, said: “Our parent company is the Royal Bank of Scotland so by association we are already members. However, we are talking to the CML about a separate registration. It is not a done deal, but it is being discussed.”
The CML represents around 98% of UK lenders and Virgin remains one of the larger financial institutions outside the fold.
If it decides to go ahead with the move it could have far-reaching implications, both for the company and intermediaries.
Virgin Direct offers a range of competitive products, but brokers that work on a commission basis are often reluctant to put business forward – whether or not the product is the best choice for the client or not – as Virgin offers no remuneration or procuration fees.
By joining the CML and signing up to the Mortgage Code, pundits believe Virgin could be teetering on the brink of offering commission to brokers, a u-turn on its previous stance. Despite looking at ways to maximise its business, Mowbry was adamant Virgin was not about to go down that route.
But Gordon Maw, Virgin Direct marketing manager, said: “I am not ruling anything out as the market is changing so quickly. With polarisation and other issues currently affecting the market, there are a number of business models that may appear. A lot of mortgage advisers work on a commission basis, so we are keeping an open mind but remaining customer-focused.”
Tony Ward, managing director at First Active, said it would be a logical next step for Virgin to target the intermediary market.
He said: “If they want to become a member and the Code remains in place, they must comply with it. But it is a commercial market place and no doubt Virgin will come up with some good ideas.”