You are here: Home - Better Business - Business Skills -

Are secured loan referrals still an option? Promise Solutions

by: Steve Walker, managing director, Promise Solutions
  • 02/12/2015
  • 0
Are secured loan referrals still an option? Promise Solutions
Many brokers pride themselves on their whole of market status, but the Mortgage Credit Directive (MCD) could change this. Steve Walker looks at the options for brokers.

As we approach full regulation of secured loans, for many mortgage brokers the plan has always been to refer any seconds cases to a loan broker. While there is a lot to be said for offering a more holistic service to your clients and advising on both firsts and seconds, one can also understand why some brokers prefer to pass the case on to an expert instead.

I’ve no doubt many brokers have been planning to do this once seconds come fully under the Financial Conduct Authority’s (FCA) jurisdiction in March next year.

However, a recent reminder from the regulator may have made them change their minds. In case anyone missed it in the small print, the FCA has confirmed that any broker who chooses to restrict their advice to only firsts or only seconds will no longer be able to call themselves independent or whole of market – nor will they be able to use such terms in their marketing and branding.

As many brokers pride themselves on their whole of market status this will come as a blow to those advisers who were planning on operating a referral model for second charges.

So what options do they have?

Well, they’ll first need to ask themselves just how important the independent label is. If they are willing to sacrifice it then referring clients to a loan broker is certainly still an option. And it has its benefits. In doing so the broker relinquishes all responsibility for the client with the loan broker taking sole responsibility for the advice.

If, however, the broker does want to keep his independent status he should look into using a loan broker in a packager capacity. This means the advice would still come from the broker but the packager would offer all of the underwriting support and assistance needed to ensure a compliant sale. The second charge packaging model already exists so brokers have nothing to fear apart from choosing the right one.

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
Housing minister Brandon Lewis
Affordable homes grow at fastest rate since 1993

The number of new affordable homes has achieved its highest annual increase since 1993, with 66,440 being delivered in the...