Speaking at Mortgage Solutions’ The Mortgage and Protection Event, Roberts warned that as market competition continues to bite lenders may increasingly look at other routes for client acquisition.
He also suggested lenders could be pushing the Financial Conduct Authority (FCA) to consider widening regulation around execution-only.
Roberts noted that he spoke to a lot of lenders regularly and that they were starting to feel the squeeze with mortgage rates coming down significantly as the base rate has risen by 0.5%.
Lenders can’t bail brokers out
He told the Manchester audience: “Your proc fees have increased over the last four years, you can see the emergence of proc fees on product transfers.
“Lenders are now paying more proc fees to the market. And this is at a time when the mortgage rates have actually come down.”
But he warned that the current level of proc fee payments was unlikely to grow with an expected plateau coming.
“In an environment where lenders are paying more in procuration fees, where mortgage rates have come down and base rate has gone up, lenders are starting to feel the squeeze,” he said.
“I don’t think we can rely on lenders to bail us out and to keep our businesses’ turnover increasing.
“If the cost of acquisition in this channel is increasing and they are starting to feel the squeeze, lenders may start to look at other acquisition channels for their business.”
Lenders backing execution-only?
As a result of this situation, Roberts also raised the potentially controversial point that lenders could be pushing the FCA to be more open to execution-only business.
“If you look at the Mortgage Market Study (MMS) – the FCA has a real focus on trying to drive more execution-only business,” he said.
“Where is that push coming from? Who’s the driver? Who’s giving a push to the FCA?
“Yes it could be some people in the sandbox, some fintech or digital firms, but it could also be lenders as well.
“They may be looking and they may be hoping that regulation changes to allow them some more execution-only business,” he added.
Retention fees here to stay
Speaking immediately after Roberts at the Manchester event, Accord director of intermediaries Jeremy Duncombe addressed some of the points around proc fees.
“Just so you know, we are not looking at dropping our proc fees,” he said.
“Retention proc fees are in, they are here and they are here to stay.”
