Scottish Life Mortgages has launched a "virtual bank" exclusively for IFAs which should for the firs...
Scottish Life Mortgages has launched a "virtual bank" exclusively for IFAs which should for the first time earn advisers, mortgage packagers and brokers a commission if they advise clients on credit cards and personal loans as well as mortgages.
Until now, many advisers have shied away from advising clients on debt management, unless the client was prepared to pay a fee for the advice, because there has been little prospect for brokers to earn anything on the time spent surveying the industry for suitable products.
That could all change, however, and Scottish Life Mortgages is now predicting several competitors will step forward to offer IFAs and mortgage brokers at least 1% commission on credit card purchases and transfers, for example, while other products, such as personal loans, will carry varying commission levels.
It might also spark the sea-change needed across the industry to target tomorrow's younger clients who already seem to acquire debt before they have the space to consider what they would like to do with their finances.
Advisers will be expected to assess whether the charges and additional commission on loans and credit cards is likely to impact on the cost-effective nature of transfers, before recommending product take-up or transfers, says Richard Boundy, business development manager.
Although Scottish Life Mortgages has been around for some years now, it is only since the Royal London takeover two years that the firm has begun to rebrand the company and products, and target the business-to-business market.
As a result of a year's intensive work and a deal with Tri-Gold to use their outsourced mortgage software, the life insurer is now able to offer most types of mortgage from 19 different providers on the packaged panel, says Paul Thompson, marketing and communications consultant.
A mortgage club containing nine high street mortgage providers is also being offered, alongside a conveyancing service to help advisers write wills for clients as well as several other services to help mortgage brokers pass CeMaP exams, for example.
SLM's primary focus will be placed on the "specialist adverse" mortgage market and targets will be set mainly on generating business with mortgage networks.
The increase in minimum AE contributions has had little impact on opt-out rates - with cessations after April increasing by less than two percentage points, data from The Pensions Regulator (TPR) shows.
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