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IFA offers cash to clients

  • 24/02/2003
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Independent financial adviser Hargreaves Lansdown's mortgage arm is to offer customers cash if they...

Independent financial adviser Hargreaves Lansdown’s mortgage arm is to offer customers cash if they submit mortgage applications on an execution-only basis.

Ian Jordan, head of mortgages for Hargreaves Lansdown, said clients were well informed and often plumped for a mortgage they had sourced themselves, despite having had an advisory session and recommendation.

Some had even contacted the adviser independently asking if they could receive a cut of the procuration fee if they submitted their chosen mortgage through the company.

Jordan commented: ‘I have had clients ring me who have not asked for mortgage advice, but if they could share our commission if they submit their application through us, so there is definitely a demand.’

Due to differing procuration fees from lenders, Hargreaves Lansdown will not pay a percentage of fees, but give cash according to loan value (see table).

Jordan added: ‘We have been giving clients full advice in the past and we will continue to do that.’

Although the service is in its infancy, Jordan said: ‘The internet is the next phase. We are looking to develop a facility so everyone can apply through us online. It is not a long way off although we have yet to set a timescale.’

Siobhan Hotten, head of public relations for Bradford & Bingley, said: ‘I think on the face of it, it is a novel concept.’

However, she felt as the mortgage market developed there was an increasing demand for full advice and questioned how big the market for execution-only services was.

If borrowers move to such a style of mortgage application, Hotten questioned whether they would bother to go through an intermediary and instead simply go to the lender direct.


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