In the four days since 21 March, 80% of brokers have retained independent status and are choosing to package deals without referring to a master broker or packager, enquiries from Watford-based specialist finance broker The Loans Engine suggest.
Ryan McGrath, chief executive of The Loans Engine, said: “Our initial research will undoubtedly surprise many within the second-charge master broker community who would have anticipated many more DA firms and advisers opting to introduce their clients on, rather than issue the advice and recommendation.”
Second-charge lenders have also been examining direct to broker propositions for months which will herald another sea change for this swiftly moving market as fees for secured loans continue to trend downward.
Intermediaries and lenders attending the Specialist Lending Senate, a Mortgage Solutions event earlier this month agreed that fees would fall as a result of the MCD, although the same audience confirmed product rates had plateaued.
In a joint-TMA/Mortgage Solutions survey of DA mortgage brokers conducted last year, 27% of advisers said secured loans were still too expensive to recommend to clients.
John Charcol product technical manager Simon Collins said the London-based broker firm had bought secured loan specialist Simply Finance to allow it to advise on secured loans in-house and keep its independent label.
“Before MCD, it was too easy for brokers to refer secured business and still get a reasonable commission but now advice needs to follow the normal MCOB sales process. If you know what you’re doing, it’s easy enough and a lot more advisers are thinking I can do it,” he said.
