Lloyds Banking Group is cutting the agency fees it pays on product transfers so it no longer matches new business, according to brokers.
In the latest news this week, advisers were informed that fees will fall from January 5 across all the bank’s lending brands.
Sebastian Murphy, group director of mortgage services at JLM, said LBG had so far maintained parity between fees for new business and product transfers and was therefore “somewhat an outlier”.
Murphy said the move was sure to disappoint brokers, especially after other recent decisions by the bank.
He said: “There is no doubt this is an excellent policy which shows a real commitment to advisers and the work we carry out.
“In announcing this new agent fee structure, there were a number of positives, such as an increase in agent fees for first time buyer business.
“However, to say that the decision to cut fees for PT procedures is disappointing would be an understatement, as LBG has made numerous other decisions that appear to demonstrate a reduction in its commitment to consultants and the value of its advice.
“For example, BM Solutions – hitherto an entirely intermediary-focused lender – has said it will deal directly with existing borrowers.
“In addition, Halifax has been using its banking app to market its mortgage advice directly to customers, without any reference to the advice or original adviser when it comes to existing borrowers.
“Instead, its communications urge customers to contact them directly about their next mortgage, or to check comparison websites. Taken together, the direction in which LBG is heading appears worrying.
“Finally, two points about the timing. First, LBG decided not to announce the news directly, but instead announced it via mortgage clubs. Second, it chose the week of the Budget to announce the news, which is a bit like choosing a ‘good day to bury bad news’, no doubt anticipating how unpopular parts of this announcement, particularly the PT proc fee levels, would be among advisers.”
Following this announcement, Paradigm Mortgage Services has launched a new product transfer calculator to its member firms.
The calculator allows companies to see the difference between their current PT revenue from London Banking Group lender Halifax and next year’s revenue.
