This suggests a split between brokers as they deal with the increasing complexity of many mortgage cases that come across their desks.
With no respondents at all stating they are only dipping their toe into the world of packagers by using them a little more, it’s clear that those who are referring their complex cases onwards are doing so wholeheartedly, but many aren’t using them at all and are instead using newfound expertise to handle everything in-house.
More companies take complexity in-house
Nicholas Mendes, mortgage technical manager at John Charcol, said that with transaction levels still depressed due to cost-of-living pressures and the fact that many households are only now coming off the last of the ultra-low fixed rates, many mortgage brokers are tackling more complexity to keep up volumes, which explains why they aren’t outsourcing more difficult cases.
He said: “A lot of brokers have had to diversify and become broader in what they can handle themselves.
“That means areas [that] may once have been passed to packagers, such as adverse, commercial, second charges or bridging, are now more often being brought into a firm’s own advice offering. In many cases, brokers have built up the confidence, time, and expertise to deal with more of that work directly rather than outsource it.”
Carmen Green, from Xpress Mortgages in Byfleet, said her firm is definitely at this end of the spectrum.
She said: “We are using packagers less, as the percentage of our business enquiries with more complex needs has grown over the years.
“These are the type of cases we would have typically submitted via a packager for the additional support/access to certain specialist lenders, but since we are getting a growing number of these enquiries, we have instead spent time expanding our knowledge in these areas.”
“We can look after our customers without needing to use a packager, avoiding the additional third party, which can sometimes slow an application down and cause more paperwork for all involved,” she added.
Mendes added that the structural shift in the market, which has seen more consolidation of firms into networks and partnerships, has also stopped some outsourcing to packagers.
“You naturally end up with more of a closed ecosystem. Specialist business is more likely to be retained or referred internally, rather than sent outside to a packager,” he said.
He added that pricing models, where lenders have given more direct access to specialist products and pricing, have reduced the need for packaging in some cases.
“Historically, packagers could often secure better rates or procuration fees because of the volume they were placing. There are still cases where that applies, but lenders have broadened their panels and given more brokers direct access to products and pricing that may previously have been harder to reach,” he added.
Who still needs packagers?
Mendes said these specialists “still have an important place in the market”.
“While the poll result is not especially surprising, it does not mean packagers have become less relevant,” he added.
Green said packagers are particularly relevant for certain types of adviser.
“Packagers still have a place in the market for sure, especially for advisers who are not directly authorised by the FCA and may have restrictions on what they can advise on, or those who are newer to the industry and do not have the experience to help them confidently deal with more complex applications,” she added.
A new model – partnerships
Jason Berry at Crystal Specialist Finance said the nature of relationships between packagers and other brokers in changing in the current volatile market.
He continued: “There is a clear shift towards a more collaborative partnership model, where brokers increasingly lean on specialist partners to support complex parts of the customer journey – particularly bridging, commercial, or specialist buy to let.
“This isn’t about brokers stepping back. Quite the opposite. It’s about brokers taking greater control of the client relationship, while ensuring the advice delivered is as strong as it possibly can be.”
Where brokers can’t advise due to permission or network restrictions, choose not to advise because of complexity or time constraints, or simply recognise that a specialist partner can deliver a better outcome, that’s where packagers come into their own.
But Berry said packagers themselves are changing.
He said: “Crystal’s role is evolving beyond traditional packaging into something more closely aligned with where the market is heading.
“We are increasingly acting as a sales fulfilment partner, supporting brokers by delivering advice and recommendation in specialist areas, leveraging deep lender relationships to unlock solutions others can’t and providing certainty and speed in complex cases.”
In these cases, the broker remains at the centre of the client relationship, Berry noted.
“They introduce the opportunity, retain the customer, and ringfence that relationship, ensuring competition is kept out – while we focus on delivering the best possible outcome behind the scenes. It’s a model that works for everyone,” he added.
These changes might explain why the role of the packager is so unclear from the Mortgage Solutions poll, with some using them far more and others not using them at all.
The relationship and definition of a packager is evolving fast.
What are your thoughts? Do you agree with our contributors? Email us at editorial@ae3media.co.uk.
