Describing the issue as a “hot topic” in the broker market, the intermediary arm of Skipton Building Society said it felt the time was right to implement the pilot.
Skipton would not reveal the rate of the retention fee but confirmed it will be different to that paid on new business. If the pilot is successful, Skipton plans to roll out the facility later in the year.
Paul Darwin, director of intermediary relationships (pictured), said the lender had made the decision after research and feedback from its broker partners.
“Good and appropriate customer outcomes are central to this pilot and we recognise that brokers carry out a full advice process with our customers, including appropriate market research before making a recommendation to the customer to stay with us,” he said.
“It is, therefore, only right to pay a procuration fee on retained business. While this will not be the same fee as we pay on new business, it is nevertheless, a fair reflection of the work carried out by the mortgage adviser.”
David Hollingworth, associate director communications at London and Country Mortgages, said: “We believe that this approach will provide a better joined up process for our mutual customers.
“Being able to take the initial advice on the Society’s existing borrower deals through to completion, where appropriate, will make for a smoother, more efficient process for all concerned and we’re convinced it will be popular with advisers and customers alike.”