HL Partnership is asking its members not to relax in the run up to the end of the year. In October, over £40 billion worth of mortgages will reach the end of their current fixed or discounted rate arrangements and are up for product transfer or remortgage.
Depending on which source we use, product transfer business this year is predicted to be worth £181 billion in 2021, with over £220 + billion predicted for 2022.
According to HLP’s Managing Director, Shaun Almond, the first challenge is to make sure that brokers are aware of clients’ cases coming up for renewal or replacement. He said, “Customers are no longer prepared to be passive. They will expect their financial adviser to be on the ball and looking after their best interests. If he or she doesn’t bother to be in touch, plenty of alternative providers are just a mouse click away.
To put it into context, here is a very rough, back of an envelope calculation. Projected redemptions in October from some sources are reckoned to be c.£43 bn. If 75% of those were originally placed by intermediaries and we estimate that the average procuration fee was 0.2%, that would be c. £64.5 million in total. Divided equally, with approximately 18000 firms, it would mean that £3,500 per firm could be going a-begging, unless brokers take action now.”
Shaun added, “At HL Partnership, a key focus has been on training our members on how best to use our CRM technology which helps to provide all of the tools which advisers need to engage existing customers whose cases need reviewing. Anyone who has an existing mortgage and is coming to the end of an arrangement will be expecting to move into a similar or better deal and if we don’t want existing lenders or internet brokers to hoover up our customers, then we need to take action now.”