The source revealed the lending giant is looking at ways it can enhance the current retention model being offered by major rival Halifax, which introduced its retention strategy in August: “Retention is a key issue in the market and many lenders are looking at ways to move the market forward. Abbey is currently reviewing its retention strategy and looking at offering something different in the style of a loan under management system where a retainer is paid for each year the borrower is kept on the books.”
The concept to pay a yearly retainer as well as a procuration fee at the end of the term is common practice in the Australian broker market. It works on the basis that the lender pays a percentage to the broker each year the mortgage is on its books, therefore maintaining contact with the broker more regularly.
Joe Wiggins, media relations manager at Abbey, confirmed the lender was currently reviewing its retention policy stance, but admitted details of its plans were not finalised. He said: “We do not currently pay brokers a fee for keeping business with Abbey, but retention and ways to keep customers on the books is part of our long term plan. We are continuing to review our approach to retention and how it affects brokers, but have no definite plans or details at this stage. Customer retention is important but we have to make sure the choices available are right for the broker, their client and us.”
