The lender launched distribution of its mortgage products to advisers today, which will be available through London & Country (L&C) initially and then widened to Legal & General’s (L&G) Nouveau and Key Account members.
Head of intermediaries Mike Cutler said Tesco plans to keep control of its distribution.
“Both firms we have chosen to distribute [for us] have a proven model to breed new lenders. L&G’s Nouveau club offers us well-known and respected brands and L&C also have the geographic scale,” he said.
“We don’t plan to be whole of market but will gradually widen our distribution over time as the business evolves. The plan is to roll out according to our lending capacity.”
When asked whether Tesco planned to introduce retention fees, Julian Hartley, product director, said: “That’s something we will be looking at in the future. We are of the view that if the broker is doing the work for us then they should be remunerated for that, so we’re warm to the idea of it but no decision has been made yet.”
While Tesco’s 95% loan-to-value mortgage is not available to intermediaries at present, Hartley added that both direct and intermediary products would be priced the same.
“We want customers to be able to obtain a product from us direct and through their adviser without having to worry about a difference in price,” he said.
“We’ve got a competitive range of products and fantastic service and our intent is to maintain those levels. We’ve created what we think is a leading system for brokers while also paying them a competitive proc fee. If you take all those bits and add them together then I think we’ve got a very compelling offer.”