This week our experts addressed whether lenders are becoming more pro-active in contacting clients earlier as deals near expiry, and how brokers should react.
Greg Sturrock, independent mortgage adviser at Thomas Heald, believes lenders should be telling clients to contact their broker first.
Conor Murphy, director of Capricorn Financial Consultancy, argues that brokers should expect competition from lenders and need to have a good strategy in place.
Aaron Frizzel, operations director at Mortgage Advice Bureau Scotland has not seen a substantial increase in lender communications but believes the competitive market needs broker involvement.
This practice by lenders makes my blood boil.
If the applicant was introduced to the lender by a broker, the lender should be making it clear to the client that they should contact their broker first.
I keep a database of all mortgages I have completed, sorted by redemption date. I usually contact clients approximately two months prior to switching to the variable rate with the intention of either remortgaging or completing a product transfer.
Most lenders are now either paying us for product transfers or are in the process of setting up their software to allow us to complete the transfer.
But it does make me wonder if they are proactively chasing the transfers before the brokers get around to contacting the clients to avoid paying the procuration fees.
I’ve had a good half a dozen cases in the last couple of months where I have called the client to find the lender has already been in touch, and two or three where they had proceeded with an application themselves.
Once I explain that if I had placed the transfer for them I would have been paid on it, they can’t apologise enough.
Lenders are getting more proactive in their contact strategy.
This is not true across the board, but there are definitely some who are getting better at this and bringing forward their contact dates accordingly.
I think this is inevitable and brokers cannot complain too much about it; lenders are happy paying brokers retention fees now, which is great, but likewise they should be allowed to try and retain that business for themselves.
As we are now on a level playing field in terms of the products that we can offer it will then come down to who offers the better customer service.
Brokers are better placed to do this, but obviously they will need to have a good strategy in place to do so.
I believe lenders will improve their digital capabilities massively in this area moving forwards, which is why we use fully automated customer contact and remortgage retention technologies.
With this underpinning everything and great brokers at the front end, we retain 80-85% of all of our mortgage business and we expect to increase this moving forward, regardless of what lenders do.
For us it is more important to have access to the product selection than worrying about what the lenders do.
Customer service is effectively our entire business model and therefore we should always win on this front.
At present proactive lenders have not had a marked impact on us.
It’s always been a consideration: existing customer deals; dual pricing; lenders contacting our clients direct; but this affects all brokers equally.
Our process gives us the best possible opportunity to contact clients at the most effective time for us to retain their business, for them to benefit from the advice based service we offer and have the best deal for that client arranged at the point their current deal concludes.
Feedback from our advisers supports this.
We have not experienced large numbers of either new enquiries where the clients have something lined-up from an existing lender, or our own clients who are in need of review commenting that their existing lenders has already been in touch.
Without highlighting which of the few lenders are more proactive in this area, it does exist. Let’s hope that they don’t all become too proactive with their mortgage book.
This is especially so as the landscape currently provides those looking for new deals with exceptionally low rates, and with a different lender.
Overall, I believe the key strategy hasn’t changed.
Clients benefit from, and generally appreciate, an ongoing relationship based on trust.
We will continue to value our existing clients and hope that the timing and quality of our advice keeps the competition at bay.