Changes to Santander bank system cuts out IFAs

Santander bank appears to be cutting advisers out by bringing in a do-it-yourself system for prospective borrowers, IFAs have claimed.

Ian Rodgers, owner of South Wales-based CA Mortgage Services, commented on the launch of the Santander for Intermediaries online mortgage transfer service, under which brokers can transfer existing clients to a new Santander mortgage deal. The brokers will not be paid procuration fees for retaining business, while new business could see clients having to pay a fee.

Mr Rodgers said: “Halifax, Woolwich and BM Solutions are leaders in retention and have always been very hands-on with intermediaries.”

However, he said it seemed as if Abbey (Santander) has looked at its “rivals’ business models and instead assumed that if the broker charges a fee for changing the product of one of Santander’s customers, that will be fine, plus we still hold the baby for compliance purposes”.

Another broker, who did not wish to be named, wrote on the broker forum Cherry: “Santander is not going to pay you for retaining business, and on top of that it will be letting clients do a DIY on the system, cutting us out altogether. Great way to make all your introducers angry.”

Donna Hopton, director of Cherry, said: “It may be that Santander has the best retention product or that the client isn’t in a position to move. However, without advice, how can it be established that the best option for the client is to stay put?

“There is no doubt that the move towards direct dealing is not always the best option for the client, and the industry needs to find a way to make sure the broker can get remunerated fairly.”

A spokesman for Santander said: “Our service allows brokers to transfer eligible existing Santander mortgage clients onto a new mortgage deal online. End to end, it should take brokers no more than 15 minutes to complete.

“There are currently no plans to pay a procuration fee for using this service. However, as for new business, brokers will have the option to charge their client a fee. We believe this service will help intermediaries support their customers and maintain a mortgage that’s right for their needs, while providing them with the support they should expect from their lender.”