Steve Walker, managing director at Promise, said the firm is intending to apply for permissions to advise on first charge mortgages within the next six months but is yet to decide on whether the route will be directly authorised or appointed representative.
Currently brokers can refer any second charge business to Promise or use the firm as a packager for first charge loans.
Walker said that it was important for second charge master brokers to think about widening their scope post-Mortgage Credit Directive, as second charge lenders begin to widen their distribution to offer advisers direct access. At present, intermediary access to second charge mortgages is only available through a master broker.
However, Walker added that its first charge advice proposition would be offered through a separate business entity and to direct customers only, to avoid a conflict of interest with its intermediary partners.
He said: “Advising on first charge mortgages is something we will do with more of a view to supporting customers that apply to us direct as opposed to broker introductions. I’m not convinced that it’s a service that our brokers would want us to offer to their own clients as it makes it look as if you’re questioning whether they’ve done their job right.
“If a mortgage broker passes a case on to someone like us because they’re unable to place it as a first charge, they will expect us to find a secured loan option if possible. If we were to advise on mortgages within the same business and then decide a certain case can be placed on a first charge basis, then the broker will think ‘well I could have done that myself’. In terms of the relationship with your broker, it’s a recipe for upsetting people.”