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Coventry reveals retention proc fee plans while RBS and Nationwide stand firm

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  • 11/01/2017
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Coventry Building Society has committed to paying procuration fees for retention business, but Nationwide and Royal Bank of Scotland have maintained that they have no plans to introduce the fees at present.

In a statement, Coventry said it was committed to “paying intermediaries proc. fees for retention business “during this year”. It will release details in due course.

During a panel debate at the 2016 Mortgage and Protection Event in November, Nationwide’s head of accounts Gary Salter said it was disingenuous for the industry to label lenders that did not pay for product transfers as non-broker friendly.

A spokeswoman for the lender said: “We have procuration fees constantly under review but have no plans to change our current model at this time.”

RBS, which owns the Natwest brand, said it has no plans to change its proposition but is also keeping this under review.

Gemma Harle, managing director at Tenetlime, said: “Nationwide will be very much outliers if they decide not to pay retention fees. It’s great that more of the lenders have recognised they should be paid for the work they’ve done because that advice adds value to the lender, so those lenders that are not paying will find that hard to justify now. We understand that all firms have financial constraints but at least some recognition goes a long way.

“It’s fantastic that Santander will introduce product transfer fees but it’s also interesting that they have changed their stance as they had a very entrenched view on the matter previously; I’d like to think it was because they were listening to the industry and taking their feedback on board. Timescales will be one to watch on Coventry’s announcement.”

As a new lender to the intermediary market, HSBC said it has had very few customers reaching the end of their introductory term that have come through a broker. A spokesman added: “The retention proposition for brokers will be reviewed in due course.”

Of the remaining top 10 UK lenders by gross market share according to the Council of Mortgage Lender’s (CML) 2015 data, Yorkshire Building Society is currently piloting an initiative, while Santander revealed they would begin paying a fee of 0.2% to all intermediary partners from 1 July.

Lloyds pays a full procuration fee of 0.33% to advisers on retention, while Virgin Money launched its proposition last year and pays a rate of 0.38%. Barclays and Clydesdale both pay a rate of 0.2%.

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