Current account mortgage Virgin One is to be offered via intermediaries following a successful eight week trial with Surrey-based brokers Maddison Monetary Management.
Previously only available direct over the phone and internet, the product will be sold now through a network of intermediaries during the first few months of 2001.
Virgin One combines all a customer’s finances, including their mortgage, into a secured personal bank account with the Royal Bank of Scotland. Launched in 1997, the account has over 60,000 customers, with lending totalling £3bn.
According to Andrew Smith, communications manager at Virgin One, the move aims to formalise a number of existing relationships with intermediaries. He said: “A total of 12% of the company’s sales to date have been through intermediary recommendation. If you look at mortgage sales as a whole, 50% are arranged through intermediaries, so we hope to create a very significant channel of growth.”
The decision to work with intermediaries was also influenced by research which revealed that a high percentage of the company’s customers believed it was important to have contact with an adviser when going through the mortgage buying process.
Smith said: “Our research showed that there is a very real need for our product out there, but one point customers made clear was that they would really value having face to face contact when arranging a mortgage.”
According to Mark Warner, monetary manager at Maddison Monetary Management, the product received positive feedback from customers during the trial. He commented: “The trial run of Virgin One proved very successful as it is a powerful financial planning tool. Many intermediaries are aware of the product, but until now, have been unable to offer it to customers.
“We received some really good feedback from customers who were especially impressed with the client statement. This is an excellent tracking device and allows customers to observe the effect of overpayments in their account. The administration process was also very slick. The product generated a lot of interest and I would definitely recommend it to other intermediaries.”
Smith added: “Commission rates are yet to be finalised, but they will be comparable with the rest of the market and represent the valuable input of intermediaries.”