This week’s comments come in response to: How do you solve a problem like product transfer proc fees? – JLM
Sox said: “I’m doing more work than ever on product transfers (PT) as with rates continually changing, currently for the better, I’m having to review 30 to 40 PTs every time a rate announcement is made, obviously not all with the same lender.
“As the rate has in most recent cases, got lower, and we still have time before the current deal ends, then we are recommending cancelling and taking the new deal, which all takes time and research/suitability letters need updating and this on many cases at a time, multiple times.
“I’m sure the lenders would be happy we leave them on the higher rates of course, so won’t reward this extra effort.”
They added: “This year more than ever before I’ve picked up referrals from clients whose mortgages I manage and who are currently in a deal, but want to be added to my books so I can monitor rates for them. You can’t take on this new business without a full Know Your Customer fact find and recommendation.
“Finally if we are in a market where transactions dip and PTs are the main source of our income, but significantly lower than we are used to earning, are our jobs sustainable?
“If we are no longer available to offer advice, it’s back to the lenders, and as established already, they don’t really want to do this. So why not help us be there for our ‘mutual clients’ for the foreseeable future by rewarding ongoing advice and assistance?”
Brokers need to be ‘paid more for responsibility’ of PT
Michelle Lawson said: “Good point and agree with all of this [PTs need higher proc fees]. The research involved to come to this conclusion is the same as an application and we also have to do all the compliance and take on the advice too, when lenders are too quick to only give information in most cases.
“Sadly, I don’t think the general public is well educated on what the quality of advice means and are also under the impression that lenders are doing this by the products they are offering.”
She added: “I am happy us brokers can do these for clients, however I think we need to be paid more for the responsibility.”
RRJRRJ noted: “Remember that we get paid a proc primarily because we, as a broker, take the advice liability, in perpetuity. Lenders do not if arranged directly with consumer, which is something that Consumer Duty might change. I agree that there is less work on the valuation and legals, but this is small fry compared to liability.”
‘I can’t agree a PT involves the same amount of work’
In the viet said: “Sorry, I can’t agree a PT involves the same amount of work. Simply not true, much less documents are needed, if any, and no valuation or solicitors involved.
“I remember in 2008 when very few lenders even allowed the broker to organise the PT, never mind paid them. I’m all for higher procuration fees but realise why they are not on a par with full proc fees.”
The comments here are from our readers and do not necessarily reflect the views of Mortgage Solutions and Specialist Lending Solutions.
