Almost two thirds of directly authorised (DA) intermediaries believe there has been a shift in the reward structure with procuration fees playing a less prominent role and fees for advice becoming more important.
According to The Mortgage Alliance’s (TMA) April Distribution Indicator, 65% suggested that they have experienced a shift in the reward structure with procuration fees playing a less prominent role and fees for advice becoming more important. 35% stated that they did not feel that this was the case.
However, when asked if they had changed from a commission only business into a fee-charging business in the last 12 months just 26% said that they had made the transformation. 9% declared that they were in the process of making the change and 65% stated that they had not changed. Of those that had not adopted a fee-charging structure only 12% said that this was a future intention 57% said that maybe they would contemplate such a switch in the future and 31% highlighted that this wasn’t a consideration.
When asked if they thought a shift to a fee-charging basis could result in the loss of clients 52% of DAs responded that they expected this to result in a loss of clients, 35% stated that they didn’t believe this to be the case and 13% expressed their uncertainty.
Phil Whitehouse , head of TMA, said: “The subject of fees and commission is a sensitive and emotive area and one which continues to be at the forefront of most intermediary firms thinking. I agree with the majority of DA respondents that there has been some shift in the reward structure. As such firms really have to look long and hard at their individual business and client bank to see what works best for them and work diligently to make sure that whatever decision they make is the correct one.
