DUAL-PRICING CAMPAIGN - Last chance to give your views

One key part of our campaign will be to put pressure on the FSA to make lenders give intermediaries access to information from their full range of products, whether they pay a procuration fee or not, to save the advice process in the mortgage arena.

But we need your help. Do you feel strongly about the issue of dual-pricing? Is it damaging your business? What can we reasonably ask the FSA to do to make the situation easier for you? You tell us and we'll tell them.

If you would like to contribute your views to the campaign, please call our mortgages reporter John Bakie on 020 7484 9805 or e-mail [email protected]

Responses to the campaign will be posted on the site (unless you do not give us permission for comments to be made widely available).

And this is the situation so far....

The FSA has been under increasing pressure from mortgage intermediaries to resolve the issue of dual-pricing which has dogged the mortgage market for several months.

Hector Sants, chief executive of the FSA, has previously said dual-pricing is a commercial matter for lenders. He claims intermediaries are not breaching TCF rules by failing to recommend the best deals in the market to their customers, which are often direct-only deals in the current market.

However, a number of intermediaries, including Phil Castle and Stuart Duncan, have criticised Sants for making contradictory statements on dual-pricing and principles-based regulation.

The FSA continues to point out its definition of ‘whole of market’ accounts for the fact that intermediaries will not necessarily be able to offer all the products available.

However, intermediaries are not satisfied with this explanation, and recent articles on the issue have provoked an unprecedented response from IFAonline.co.uk readers.

YOUR COMMENTS SO FAR

"Being fee based advisers, all we expect is to be able to obtain information on behalf of our clients, whom we represent. The protectionist attitude of many lenders is unprofessional and obstructive, and suggests 'sharp practice'. Perhaps if every broker was to start faxing to every lender a client's signed authority to receive information (a) they would have no choice but to acquiesce (b) they'd be inundated with paper and follow-up calls such that they'd soon find it easier to make the information available to all."

Gavin Southwell, Weston, Murray & Moore Ltd

"Would just like to say I agree with all the comments made regarding dual pricing. I, like Mike Mullings, am absolutely flabbergasted at the FSA’s mortgage comparison site, the FSA which champions advice is undermining the heart of it’s very ethos by the very existence of such a site. It can be dressed up anyway you like but this is sending out a very clear message by the FSA.... go direct !!!!! It really is a sorry state of affairs at the moment, one which could, ultimately, put me out of the business after 20 years ......and even then, still hold me accountable for the remainder of my life!!! It would be interesting to see the recruitment figures for the industry for the last year! Not Amused at all. Thank you

Alan Townley, Dave Alan Financial Services

"I would recommend that every mortgage intermediary in the country read Stuart Duncan’s letter and take note. If the insidious and apparently unrestricted power of the bureaucrats within the FSA continues on what seems like an inexorable path. It will mean that the consumer will eventually be served up with a dish of State monopolized 25 year fixed rate CAT standards products (or some other such nonsense) delivered by an FSA cartel spouting a pre approved tick box process masquerading as advice to the unsuspecting and acquiescent public. It concerns me that those who agree with Stuart also risk finding themselves on a gulag."

John Mawdsley

"I for one will be seeking legal advice if this and the 15 year long stop is not accepted/resolved by the time annual FSA/FOS/FSCS fees are due to be paid (in August?) with a view to making acceptance of my cheque for payment contingent on the FSA/FOS/FSCS confirming they will ensure all actions they take in future are legally tested (including the 15 year long stop, dual pricing, agency law and legal definitions of words such as 'whole of market'.

Like Duncan I have taken the FSA to task on this issue and have spoken to many like myself who are not particularly focused on the mortgage market who consider the FSA plain wrong! I am trying to point out to the FSA with regard Independent advice (or lack of with mortgages in the current market) and the FSA failure to acknowledge there is a TCF problem developing.

I also agree with what others have said about “a business must be allowed to deal with who it will”. The issue is really with regard an adviser acting as agent for their client. If an adviser is the agent of their client, the refusal of any party whether that be a provider or lender to acknowledge and accept them as the clients agent is discriminatory and potentially an unfair contract term. The argument is also applicable to advises acring as agents for members of Group Pensions and I have an ongoing disagreement with both the FSA and at least one provider on this issue.

It is fine for the lender/provider to not deal with a client because it is not the market group they want (unless stakeholder, in which case, that is the market they have opted for, like it or lump it) to deal with (that is their prerogative), but to deny the client access to their adviser (whether legal or financial), is surely an unfair contract term and having originally come from branch banking and done a little of my banking exams including a bit of law, I suspect in legal cases, the lenders and providers would not have a leg to stand on, yet the FSA are letting them get away with it with both Mortgage deals at present and Group Pensions until legal action is actually taken!

Ironically, my firm whilst regulated for mortgages, do very few, yet I don’t think firms like mine and others can afford to let the FSA’s flawed actions on mortgages bring the whole industry in to disrepute as it will affect both Investment/Pension business and Protection business, hence why we all need to take issue now, before it is too late and leaving our supposed representatives to discuss matters behind closed doors (over lunch) with the FSA is not acceptable." Phil Castle, Financial Escape

"We totally concur with the sentiments expressed by Stuart Duncan in his letter to Hector Sants and would welcome any information you are able to supply, whereby we can add our names to any concerted joint-effort being made to the FSA on this matter." Geoff Griffiths, Partner, Shire Financial Management LLP

"Fantastic, about time someone stands up to the FSA and it’s high powered buddies (or seems that way) of lenders." Alan Townley, Dave Alan Financial Services

"Thank goodness someone has spoken out loud about 'dual pricing' and the FSA. Three cheers for Stuart. I am confident every small mortgage advisory firm will be totally behind his comments." Karen Sharp, Principal, Sound Financial Services

"Stuart Duncan's letter is magnificent! Too many of us, me included, are frightened to put our heads above the parapit, for fear of "reprisals" from the FSA. His accurate and articulate arguments are a masterpiece, and I applaud him for it. I totally and wholeheartedly agree that the FSA is failing in its duty, and wrong in its stated opinion over the matter of dual pricing. To say that we should advise a client to go direct is an absolute nonsense. Stuart has hit the nail on the head when he challenges the FSA to either ban us from advising, or the ban dual pricing. PLEASE can you start a Financial Press campaign to put this very challenge to the FSA, on behalf of brokers generally. You must appreciate that it is difficult for us, but you could do it as a campaign. You know you have got the support." David Nicholson, D&D Consultants Limited

"A very long letter, but it is absolutely spot-on. Congratulations to Stuart for saying what we are all thinking. The FSA are not seeing the wood for the trees on this matter." Sheila McCombie, Mortgage Doctors (Scotland) Ltd

"Stuart should be made a god or Prime Minister. The FSA has a clear conflict of interest here as they want to prevent another Northern Rock by ensuring banks meet liquidity requirement, but to the detriment of consumers. I think responsibility for liquidity monitoring should be returned to the Bank of England, who did a good job with this in the past, while the FSA focuses on consumers." George Williamson, Director, Mortgage Advice Brokerage Glasgow

"As a consumer I have no issue with dual pricing but for all of my mortgage purchases I have chosen to take an advised route – using, as it happens, Sheila McCombie, Mortgage Doctors (Scotland) Ltd – who has also posted here. I choose to do this because my adviser demonstrates time and again professionalism and value add and she wraps this up for me in a convenient process. There will always be consumers chasing the cheapest rate but equally there will always be advisers who can demonstrate why it is worth it for a consumer to transact with them." Mick James, Business Development Manager, RGA UK Services Limited

"If the FSA truly believes in TCF, it cannot possibly condone this practice." R Jackson, Aegis Financial Consultants Ltd

"A very interesting letter, however everything that is happening with dual pricing was already there in the market before the credit crunch, but just not in the same numbers from the lenders. There was no great out cry before. Was that because mortgage brokers were making enough money before and suddenly with the collapse of the market the deals are just not there now? Now the deals are not there, mortgage brokers are taking the moral high ground. It is all down to basic supply and demand; before there was a huge demand for credit and the market had loads to lend therefore lenders were paying heavily to distribute their products in a crowded market. Suddenly credit is in short supply and lenders have realised that they don’t need brokers to sell their products as the supply is cut but the demand is still there, so they can sell their products without having to pay a broker. As pointed out a commercial decision. For me the problem is slightly different. If you completely separate advice from sales and set out to look at the whole market, (charging the client a fee), select the mortgage then help the client set it up, it is not possible to do the job properly. This scenario is not possible because some lenders will not send a broker a keyfacts illustration, making it impossible to make a compliant recommendation. For me this is the problem which in theory makes it impossible to be independent in the mortgage market. This is the problem the FSA needs to sort out, to create the right environment that allows a broker to advise in the whole of the market, if that is not possible then the market will always be contradictory, as it always has been. It really is a bit sad that the FSA does not recognise this and/or does not see this as a problem." Nigel Tinsdale, Financial Adviser, Tinsdale Investment Management

"Dual Pricing is totally killing the Intermediary market, over the last 5 months it has become an insurmountable problem and the future looks to be getting even worse, quoted this weekend, out of the 20 best deals on the market brokers can only advise on 2 of those, we have a 10% scope in the best buy league, wonderful,

It is embarrassing to have clients call us wanting us to handle their mortgages but then realizing that if they go with us they will probably spend about £85 per month extra (0.5% on £200k, rough calc) with our best deal compared to going directly, we cant expect clients to ever submit cases with us, and more to the point we don’t want to be arranging expensive finance for our clients, the key selling point of using brokers is to secure the lowest rates and get the best advice possible. Good brokers are now just a telephone advice service, talking through what clients should do and how to approach the direct lenders, it has been aired that we should maybe charge for this service, that would be great, here Mr Client heres a £250 bill for the 10mins chat we had yesterday, hardly likely to be a long term business model hey!! It would be interesting to see how many referral that would produce,

If something isn’t done about D.P soon, there will be many many casualties in the Intermediary market and ultimately clients will lose out. These views have to shared by every broker out there, the next 3 months will be interesting." Andrew Hart, Director, True Financial Ltd

"I have been concerned with the escalating dual pricing problems for weeks and the potential conflict of interest between TCF and whole of market when whole of market is no longer realistic. I’ve essentially written off my mortgage business income for this year but am of course helping my clients as best and as safely I can when considering the direct deals out there.

Two tangential problems I’d throw in with these market changes are the potential redundancy of our software sourcing which does not capture these direct deals and also that in my experience bank advisers even after face-to-face meetings never appear to tick the advised box on their KFIs but instead the lesser protection for the client of having just provided information after some questions have been asked.

Does this not mean swathes of people are being put in to non-advised mortgages with less protection and linked to this are there stats the FSA looks at for the banks selling their mortgages on a non-advised basis? The FSA must at least allow brokers to source KFI’s for direct deals (as Britannia have on Trigold for ages) so that we can produce a KFI for a possible direct deal – even if we don’t get a proc fee for it. That’s my personal view." Paul Pearce, Financially Prudent

“Hector Sants is living in cloud cuckoo land. For many brokers, it’s a questions of whether they can survive the year at the moment and the lenders aren’t helping. I’ve noticed that Woolwich and C&G are particularly bad at dual-pricing their mortgages. I don’t see why the lenders can’t play a reduced proc-fee of 0.2%, or a flat feel of £150 for direct deals, at least then the broker can make some money, as well as giving their clients advice and cross-selling other products.” Jim, Leamington Spa-based IFA

"This is much deeper and more serious than lenders not wanting to distribute their mortgage products through intermediaries. Now they have crossed this line it is going to make it much easier and potentially acceptable for them to continue this practice in the future providing poorly advised sales to the public who will see the cheapest initial cost as the best option in their eyes.

But as lenders now the means to seduce customers direct, it opens the floodgates for them to sell other products directly to the public without any fear of cross selling on brokers as the mortgages will not have been introduced. So what happens when a lender starts selling inferior protection policies such as critical illness or does not qualify the advice properly, what will happen to these people when they need to claim on policies in later years only to find their not covered.

From a commercial view point I can almost sympathise with a lender if it has limited reserves to lend and has to close to new business. But why does it need to discount if demand is evident. What I find particularly worrying is that none of the lenders have said they intend to abolish dual pricing when reserves permit.

Advisers do indeed have very long memories and many will remember a number of years ago how Prudential treated brokers when they shut the doors to many of their protection plans. No matter how much they try and enhance their commissions to attract new business many brokers still choose not to use them and that’s after several years! Lenders be warned." Peter Tollitt, Lilacs Financial Services LLP

"The whole point about dual-pricing is that it is the lenders who want to do the cross-selling, using the credit crunch as an excuse, otherwise this whole sorry situation migh never have happened. Whilst I agree with Nigel Tinsdale that it is supply and demand that has enabled the problem to grow, it is simply not as simple as charging a fee. Many potential clients do not grasp the value of independent advice and many do not even understand that going direct to lenders can damage their credit history if they merilly credit-score themselves all over the high street if they are anything other than prime borrowers.

It was a very agreeable situation for all concerned before this, the lenders paid us to do their job for them and we provided free advice (or at least low-cost advice) with competitive products to keep a roof over their heads in the event of calamity. It worked well and it was good for the consumer. The current situation is not. Full stop.

Thank you for the positive comments made, they are appreciated." Stuart Duncan

"The issue of being 'independent' in any market will be difficult to claim if lenders will not allow their products to be available to the 'whole market' or offer a better deal to those who deal direct and a different (more expensive) one for IFA's, which it looks like could be the situation now that the market has contracted and margins and losses have been made and need to be paid for. There will undoubtedly be some lenders preferring to keep their existing clients (where they have a credit history) than take on new unknown clients but I suspect the main lenders will still prefer to deal with the intermediary market but with a more restricted product range.

'Dual Pricing' should be something any regulator needs to keep a very close eye on to ensure that borrowers are not being misled or unbiased information and in a captive market it would be easy for lenders to take advantage of this especially when they know borrowers are fearful at the moment, so will take the route of least resistance and hassle. Lenders will undoubtedly see this as an easy sale and profit and advisers will need show where they can add value.

Will the FSA find 'dual pricing' as not 'treating customers fairly'? No I don't think they will as lenders will argue they are their clients (even if they were introduced by an adviser) and they are entitled to offer them a competitive deal taking into account the low costs of keeping an existing customer compared to paying proc fees for new clients etc and they will also argue that in doing so they are giving the client a better deal. The FSA may require lenders to make existing customers aware of the open market (probably after a long consultation period taking months) but that is all I would expect.

With 'Delloitte' predicting the cost of regulation around the world almost doubling in cost to £100 Billion by 2010 (from £28 Billion now) it is hard to see where the FSA adds value and protects the consumer (Equitable Life, Split Caps, Northern Rock etc.) all occurred with regulation in place and with their latest mistake costing the tax payer some £100 million they have a lot to answer for.

Sadly we have a Government and regulator that is trying to regulate for 'common sense' which is difficult enough to explain let alone put down into laws and regulations, but after some 10 years I think the FSA have finally realised this and now everyone has to 'Treat Customers Fairly' which of course means advisers have to demonstrate how they have done this as there are no specific rules and regulations that define this (but plenty of paperwork you have to do to demonstrate you are doing it) so if there is a problem it will be down to how the FSA interpret this. It is however about treating 'customers' fairly, and not advisers so don't expect otherwise." Michael Fallas, Principal, F.O.C.U.S.

"I am concerned that so much comment focuses on the FSA, when really this is fairly underhand behaviour by lenders. Most of them were happy to take substantial business from brokers in the recent past, but have quickly panicked into offering better deals directly, by virtue of their shops being so quiet. Surely this is short-sighted on their part; it makes no difference to overall mortgage volumes, and only serves to alienate brokers. And all to save a fraction of a percentage procration fee! In fact it doesn't really save that, because the lenders take on the costs of advising.

However I would like to see the FSA looking at high profile lenders who have been advertising very attractive mortgage rates, only for clients to have to trawl through their website to try to find what the (fairly well hidden, and usually extremely high) fees are - clearly a breach of TCF." Mark Osland, Director, Formula Ltd

"I whole heartedly back your dual pricing campaign. Please let me know what I can do to help.

I tried to raise this issue with the FSA several months ago, but I am an Appointed Rep of Sesame and was advised that the FSA will only deal with the principal, and not its member firms. At that time Sesame had no intention to pursue the matter. I don’t know if their sentiments have changed since.

You ask what can we reasonably ask the FSA to do? I think it is reasonable to ask that lenders be required to make KFIs and information on ALL of their products readily available to brokers. If lenders wish to have dual pricing, then that is their commercial decision. And certainly, I don’t think it is unreasonable to ask clients to pay a broker fee in the current climate. What is unacceptable is for lenders to refuse to provide product information to brokers. We are all under an obligation to treat our clients fairly; unfortunately this has become an impossible task when we can’t even provide KFIs to our clients for the best mortgage deals." Alexandra Madden

"For the first time in my career I know how Caesar felt on that fateful day in 44BC when he uttered his last words……'Et tu Brute?' If you believe what has happened recently is a coincidence then please dip your head in an ice-bucket and wake up! ( Oh!.. and take it out again! )

This is an attempt by the lending community to gain the upper hand in mortgage distribution stakes. The intermediary market had gained too strong a hold introducing some 70% of the total mortgage business.

For too long their volumes have been slipping and the smaller players have had to get into bed with larger lenders and consolidation has resulted. What lenders have failed to recognise is that it’s the intermediaries that have helped them build up their lending books. Salaried sales forces rarely perform as well as the self employed masses whose very livelihood depends on providing good advice and excellent service and ongoing support.

It’s no secret that this year is seeing the first wave of cheap rate maturities and this dual pricing issue is nothing other than the lenders cashing in by making it unattractive for clients to switch. It’s also an opportunity for their sales forces to work hard for a change and sell those “insurances” , both on a non-advised basis! Next year will be more of the same unless their infrastructure crumbles.

What this means that the mortgage broker has to become even more entrepreneurial and to re-invent themselves…not next week or next month but NOW. In nature it’s not the biggest or the strongest that survives the test of time but the one who adapts. The current economic climate means that cost containment and income maximisation are the two vital ingredients for survival. This means, targets, budgets, farming the database, adding new disciplines, smarter marketing and generally working very hard.

What the market is heading towards is a no proc fee environment where the client pays for the advice. This means most brokers will have no option but to change their operating models into fee charging practices for when this happens. If this means that the business is no longer viable then it may be time to merge with another firm, share administration services or in the worst case, consider a change of career!

One immediate positive step would be to associate with an IFA and allow them to offer their services to your clients ( excluding mtges of course! ) and this could be valuable additional income especially in the pensions, sipps and bonds . Furthermore hard-pressed estate agents will be looking for additional revenue so why not source local estate agents who don’t have an in-house advisor and the same goes to accountants and solicitors. One mailshot monthly will eventually yield results.

Finally, are you with a strong and stable network? The recent events will precipitate and expedite the demise of the smaller players. This month Pink has seen a record month of 54 applications !! The FSA needs to step in now to avoid a major fallout. Just imagine the consequences of a prolonged liquidity crisis, lower LTV’s, dual pricing, and no proc fees.!! I can see the Samaritan phone lines being busy for quite some time!" Bob Singh, Director, Chess Financial Services

"The problem here is that I can no longer treat my customers fairly. I can't heand on heart give them a good deal using Mortgage Brain or Trigold and I can't hand on heart charge a fee to send someone down to the Woolwich branch. I might have to consider reporting myself to the FSA for not treating my customers fairly.

I simply don't have the time to go onto every lender website to warrant charging a fee to the customer and I wouldn't be able to produce a KFI for them anyway. What the market needs is just one lender to have the guts to offer their full range to brokers and they would clean up in the current market." Trevor Withers, Summit Financial Associates

“Just one more voice in the wilderness! As ever our industry employs sledgehammers to crack nuts, a short term local difficulty has created the knee jerk reaction leading to dual pricing as a perceived expedient. How many of these lenders snubbing intermediaries today will have there salesman out next year expecting us to give all of our business to the very companies that are effectively undermining intermediaries now? Too much navel gazing by lenders means that they are not looking at the big picture. For the sake of a short term solution they are risking the ruination of many quality intermediaries that are in effect the long term requirement to their profitability when market norms return. One would have expected more from the industry to support the very valuable role of intermediaries at this time rather than seek to undermine it for the sake of very short term gain.” Colin Stratton, Page & Page Financial Services

“It’s been very well documented recently about dual pricing and anything I may add has probably already been said, but what I can’t believe is that the FSA has their own Mortgage Comparison Website, if a client logs onto the FSA’s site Money Made Clear they can actually compare many different types of mortgage products. Is this what we pay are regulatory fee’s for? How on earth can an organisation we pay fee’s to, to set up their own comparison site for public viewing, encourage clients to go direct? You couldn’t dream this! Given the current climate, I am trying to remain positive but this seems like the start of the end! How long will it be before they start advertising their site on the TV? I hope we can all do something to stop this.” Mick Mullings, The Mortgage Mart

"Its amazing at how quickly some lenders forget why they use brokers, we only incur costs when we introduce business not while we are on holiday, off sick or there just isn't any business to submit!!

To restrict some mortgage deals to branch only is to deny not only branch customers the right to compare with other lenders but also to deny the lender future customers that we may introduce, a particularly short sighted strategy.

The FSA should take note that Treating Customers Fairly is at risk of becoming a discredited exercise if the lenders can cherry pick which rules they want to adopt. We as brokers should notify our MP's (especially on the Treasury Select Committee) of this blatant market distortion by lenders. Perhaps then the FSA will sit up and take notice." Kevin Gates, Principal, Gates Financial Services

"I’m grateful to you for bringing this issue to the fore and for providing a platform for discussion. Dual pricing has become an increasingly serious problem over a period of several weeks and months.

Now perhaps isn’t the time or the place, however the lack of communication from the large Mortgage Clubs regarding their activity on this subject (or rather inactivity) is disappointing. They’re happy to make a margin on our business and to promote their massive lending volumes (or rather our lending volumes) on their respective websites but not prepared to step forward at an early stage in connection with such a key issue.

The Association of Mortgage Intermediaries have carried a vote on the front page of their website regarding our most important priorities for AMI to work on during 2008. Of the six optional answers not one includes dual pricing. It took them until 1st May to finally post a message regarding what has become the most serious issue to threaten the intermediary mortgage sector for some considerable time.

Lenders must have a jaundiced view of mortgage customers. Most must be of the opinion that they can make multiple sales to ‘direct’ customers and can therefore cross subsidise the lower rate with the associated ‘sales’ (a reason quoted to me by a BDM of a major lender last week) however not all customers have a requirement for a new life, buildings and contents or ASU policy when they renew their mortgage terms, some simply require mortgage advice. Those offering more competitive terms for their direct customers make it difficult and in some cases impossible for us to advise our clients on their ‘lower cost’ direct products as we don’t have access to KFI’s, application forms etc. There is a limit to what you can justifiably charge as a ‘research’ fee when the system prevents you from advising on and arranging the loan as most intermediary customers prefer.

What we need is a level playing field whereby lenders offer the same products at the same price through all distribution channels at the same time. I don’t want to have a competitive edge on price over a lenders branch based adviser, nor do I want the opposite situation to arise. Customers should have access to products via branch, telephone, internet or intermediary at the same price. They can then choose to transact business through whichever channel they prefer, whether they have a requirement for an advised or non advised sale. All channels would therefore compete based on the advisers ability rather than price, whether that be intermediary, branch adviser, telephone adviser or internet.

The principle of treating customers fairly should incorporate allowing customers access to as many products as possible in a transparent manner, so that they can quickly make comparison and decide which route suits their requirements best. Differential pricing does not fit with that model and especially at a time when there is a serious shortage of mortgage products for all." Graeme Pringle

"Apparently, the schedule at Mortgage Expo today has been changed so that Hector Sants speech is now about dual pricing. It will be interesting to see if he glibly brushes aside the real issues or actually comes down on the side of TCF and principles-based regulation in this matter. Hearing the FSA's Bob Ferguson yesterday claiming that self-cert mortgages were a source of terrorist money (possibly to justify retrospective investigatory powers) made my mind boggle. I believe that this speech today is absolutely crucial and will be a key indicator as to whether the FSA's agenda is to promote independent advice or to destroy it." Stuart Duncan

"As things stand, under TCF rules, we are currently turning away business, and telling even our very best of clients to go direct. The effect on our business is catastrophic, however, as Mr Sants of the FSA says it’s is “commercial matter”. As a small IFA business with a large mortgage bias, it is now not commercially viable to offer mortgage advice, and therefore we have to make the decision to temporarily not do so. This is a “commercial matter” for our business, and we have to turn to other areas to create revenue.

The only honourable action is to tell clients to go direct, as the deals are now substantially better. We desperately need factory gate pricing of mortgage products, so they are accessible by all, or a ban on dual pricing. Until this happens, all brokers should make the “ commercial decision” to stop advising on mortgages, as how can they do honourably in the current environment?

If all brokers made the “commercial decision” to stop advising on mortgages, the consumer will soon get the message that this situation is untenable, and public and media opinion will be behind us, unless our long standing clients like the idea of taking advice from a school-leaver in a branch, or a tele-sales person in a call centre. I don’t think so somehow." David Morrans, Director, Honour Financial Planning Ltd

"Being fee based advisers, all we expect is to be able to obtain information on behalf of our clients, whom we represent. The protectionist attitude of many lenders is unprofessional and obstructive, and suggests 'sharp practice'. Perhaps if every broker was to start faxing to every lender a client's signed authority to receive information (a) they would have no choice but to acquiesce (b) they'd be inundated with paper and follow-up calls such that they'd soon find it easier to make the information available to all." Gavin Southwell, Weston, Murray & Moore Ltd

"Would just like to say I agree with all the comments made regarding dual pricing. I, like Mike Mullings, am absolutely flabbergasted at the FSA’s mortgage comparison site, the FSA which champions advice is undermining the heart of it’s very ethos by the very existence of such a site. It can be dressed up anyway you like but this is sending out a very clear message by the FSA.... go direct !!!!! It really is a sorry state of affairs at the moment, one which could, ultimately, put me out of the business after 20 years ......and even then, still hold me accountable for the remainder of my life!!! It would be interesting to see the recruitment figures for the industry for the last year! Not Amused at all. Thank you Alan Townley, Dave Alan Financial Services

"I would recommend that every mortgage intermediary in the country read Stuart Duncan’s letter and take note. If the insidious and apparently unrestricted power of the bureaucrats within the FSA continues on what seems like an inexorable path. It will mean that the consumer will eventually be served up with a dish of State monopolized 25 year fixed rate CAT standards products (or some other such nonsense) delivered by an FSA cartel spouting a pre approved tick box process masquerading as advice to the unsuspecting and acquiescent public. It concerns me that those who agree with Stuart also risk finding themselves on a gulag." John Mawdsley

"I have been a mortgage broker for the last 20 years and have ben through the previous property crisis and came out very well. However, dual pricing is a golden opportunity for the lenders to maximise their profits at the expense of the borrower and brokers. Having just completed the TCF assessment myself, I don't understand why the FSA haven't taken the lenders to task over the obscene arrangement fees that are now been charged and discouraging independent advice. Also, the FSA comments about brokers recommending clients to apply to lenders for the exclusive deals where procuration fees are not paid and charging the clients a broker fee for this is hardly treating customers fairly. Why should clients be expected to commit themselves to the additional cost of paying broker fees when it can be avoided.

This is just further confirmation that the FSA, like our current government really do not live in the real world.

As a consequence of these recent developments I have decided to shut down my business before the regulators put up our fees again as there will be fewer brokers left to fund their ineffective and expensive activities!!" Mike Parsons, Mike Parsons Associates

"Offering new customers better rates than are available to existing customers was a clear example in the past of not treating customers fairly and was therefore addressed by the regulator. However offering new customers better rates for a direct application to a lender, rather than through a broker, is hardly a comparable crime.

It may be seen as unfair (to the broker) by the broker, whose living is at stake, but that is driven by self-interest (OK - fear) and unless the customer is thereby demonstrably being deprived of clear added value from the broker input, (I wish we could offer irrefutable proof of that) how can this possibly constitute unfair treatment of the customer. It is a clear commercial decision by the lenders - no more, no less. Stupid one maybe, but hardly unfair to the customer. And since when have KFIs been removed from sourcing syatems?

I completely agree with most of you that it is at least in part driven by short-termist greed on the part of the lenders and is nothing less than an opportunistic attempt to curb proc fees and I concur that is equally stupid to alienate a source of income that is providing up to 70% of any lender's new business income stream. The enthusiasm with which the ploy has been embraced by lender almost smacks of a cartel. However, as any lender will tell you - if you can spare the time to wait long enough for someone to answer - they have more business at the moment than they can cope with. I think that is a lousy reason for treating brokers with contempt, but whats new there. If you think that they are in the least interested in your problems, get a life.

Nothing lasts for ever - good or bad - and sooner or later some smart-a---d lender will work out that they can clean up by volume lending if they reduce their rates and pay a decent proc fee to introducers. Hang on to your hats until then - its going to be a rough ride. And when its over, just remember which lenders let you down, but don't look to the FSA to solve this - it won't happen. Far better you channel your anger pro-actively and talk to your client bank - they are the ones most likely to give you enough new business to survive in the short term." Bob Stark, The Mortgage Shop

"Having just read through the website discussion regarding dual pricing, and having carefully read through the letter composed by Stuart Duncan, I simply wish to add my name to what I’m sure is a rapidly growing list of advisors who agree with Stuart’s thoughts & comments." Matthew Colley, Moving Experience

"Yes I have lost some cases and maybe clients due to dual pricing. I have recommended a particular lender / deal and the client then went on the web site and found a better deal only available directly or consulted their original lender and found a better rate than available to Mortgage Brokers with either lower costs or a lower rate. If you did not agree to charge a fee previously as you expected a procuration fee then this can mean work done and no money and maybe a client lost." Stuart Walsh, Mortgage Adviser, Park Row Associates Limited

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