Nationwide sends these out three months before the borrower moves to its standard variable rate (SVR) with the intention of a) making them aware of this fact, and b) perhaps moving them to a rate without the need for broker involvement.
It’s up to you to judge which of those two aims is the priority for the lender.
Which of course isn’t to say that Nationwide is somehow different to the vast majority of lenders in its position, but the potential for a broker mention within such a lender communication would be a shift away from many within its peer group.
Before we get too excited about such a change there’s been no decision made – this is just a rumour.
From the sounds of it, this will not be a specific mention of the broker that introduced the business initially – no reference back to the original adviser with their contact details, for instance.
Instead, it will simply be a reference to brokers, and one would think, the provision of advice.
It’s a very small step forward in terms of supporting the adviser and making the borrower aware of their options.
And, lest we forget, Virgin Money has already committed to including the adviser in its customer letters, although it also gives them the option to go online or call the lender.
Here at least Virgin is covering off the fact the customer used an adviser and that perhaps they should return to them for further advice.
This is a small step forward and something Virgin should be congratulated on, however, we’re still some steps away from an official and formal client contact agreement between lender and adviser – something JLM has been pushing for.
In essence lenders would sign-up to an agreement which places the adviser at the heart of the remortgage, means the lender explicitly refers the borrower back to the original adviser, and agrees not to contact the client without the adviser’s involvement.
You can see how the provision of such information, a commitment to work with the original adviser and an agreement to offer details on how the borrower can return to that adviser or seek advice elsewhere, is a lot different to a general and, dare we say it, token mention of brokers.
Now of course, advisers worth their salt will already be keeping in close contact with their client bank anyway, especially in the immediate period leading up to the end of the deal.
The major point to get across in this regard is not to leave it too late.
I’m sure we’re all aware of some lenders doing this six months before, with exclusive product options laid out, a tick-box form to complete, plus the promise of scrapping any charges if the transfer is made there and then.
So, advisers may well have to re-evaluate their own client communications.
It’s up to the adviser themselves to make that contact, to be established in their client’s mind about the services they can offer, and to ensure that they don’t go anywhere else should they be looking to remortgage. You cannot rely on lenders to do your job for you.
This has to be an education process that is ongoing – ensuring the client knows the protections they are losing by going direct, making them aware of the whole market, and pointing out their circumstances may well have changed and so the direct products may not be right for them.
It is obvious but it needs to be spelt out if lenders are not going to use the power of their marketing machines to take that client away.