It’s sometimes difficult to hang too much emphasis on the word loyalty. The football world is a good example, filled with badge kissing, declaring undying love for their ‘dream’ club or finally realising the ultimate ambition of signing for their boyhood favourites (even though the same thing has been said about their last dozen clubs) are all common statements and ones that also appear easily forgotten/forgiven.
To be fair though, as in many walks of life, loyalty can often be tested the most by financial situations, especially if the loyalty is not deemed to be fully reciprocated. But, without getting too deep into the moral dilemmas, it’s clear in the modern age that loyalty can often come at a price, and fundamentally that price can often be recognised in terms of added value.
In the intermediary market, loyalty is often reflected in client retention but in order to maintain strong retention levels it’s evident advisers must continue to offer value adding benefits on a regular basis. And it’s clear lenders also have to work hard to find ways to keep existing customers happy.
One element many lenders incorporate into their offerings, Barclays included, is a loyalty mortgage. Such deals, which are generally only available to current account holders, may take the form of a reduced rate, a reduced application fee or flexibility within LTV arrangements.
Loyalty mortgages are often viewed by intermediaries as a lenders attempt to maintain ownership of the client. There may well be an element truth to this but what many don’t appreciate is that it isn’t just a direct-only offering; such products are also available through the intermediary channel via selected lenders.
It’s fair to say a decent proportion of mortgages holders are unaware of loyalty schemes and many intermediaries are missing out on the benefits attached to such offerings. Loyalty mortgages can provide brokers with a valuable communication tool via a positive sales hook to revisit existing clients or even lost clients and tell them something they might not already know.
Recent figures suggest there a whopping 6.7m current account holders who could qualify for a Barclays loyalty mortgage. This equates to 6.7m opportunities to offer clients a great deal.
Indeed, on average customers have saved £538 by taking out one. An impressive figure and one that will not only increase the chances of retaining them as a client but they will also earn intermediary firms a good rate of commission.
So what should brokers look for when assessing loyalty mortgages?
– That the scheme is available to clients and is mirrored across all channels.
– That the selected deals will be seen as a value added feature which will enhance the sales process potentially allowing for a greater level of satisfaction amongst their clients.
– Loyalty mortgages should be a relatively uncomplicated business which means that the best products are generally the ones that keep things simple.
Tips and key considerations for brokers when looking for a Barclays loyalty mortgage:
– Watch out for these ‘selected’ products within product ranges
– Think about these products for both new and existing clients
– Once a loyalty mortgage has been sourced and it’s been established that the client is a Barclays current account holder for six months plus, you may wish to utilise Woolwich’s pre-approved mortgage limits (PAML) for an indication of how much Woolwich may able to lend to your client
– Remember that it’s your responsibility to check eligibility retaining evidence (three months of customer statements) for two months post mortgage completion.
– To do this you will need to check the ‘money in’ section on each statement and ensure this meets or exceeds the minimum monthly transfer in figure (£800+)
– Finally you must remember to book funds for these products as per our other range of products
Understanding a range of schemes that could potentially benefit clients is integral in helping to build a strong, long-term client base and its good practice for loyalty mortgages to be integrated into this understanding.
Now, where’s that Barclays badge that needs kissing…
