At the Mortgage and Protection Event in Birmingham, Duncombe said compared to other professions, mortgage advice was not ‘anywhere near where we think it should be’.
A survey carried out by Legal & General (L&G) before the launch of the Mortgage Market Review (MMR) found on average a mortgage application took 11 hours to process which meant an adviser earned £50 an hour. Post-MMR the process rose to 12.3 hours. Despite the increased work and costs advisers are now being paid on average £48 an hour.
Duncombe said L&G intended to keep up the pressure on lenders to pay an appropriate procuration fee to advisers.
“Appropriate is the right word. We’re not saying all fees have to go up, some lenders have already reacted and have done a great job starting to set a more appropriate fee.”
Duncombe (pictured) said it was about investing in the future of the broker market so in turn they could invest in their own businesses to guarantee the sustainability of the market.
At the start of the year Coventry Building Society raised its proc. fees by approximately 25% for directly authorised brokers, which led commentators to speculate other lenders would follow, but a major resurgence is still yet to come.
Halifax and BM Solutions increased their retention proc. fees to bring them in line with the fees they pay for new business while NatWest awarded 35bps gross to directly authorised (DA) firms and 40bps gross to appointed representative (AR) firms, a 3bps and 5bps increase respectively.
