The AFB's mortgage intermediary census results on secured loans in March showed:
• Approximately half of respondents, or their companies, advise on secured loans.
• Half of those companies that do advise on secured loans have only one person who provides advice. 40% have between 2 and 10 staff advising on secured loans.
• 56% of intermediaries have advised on between one and ten secured loans in the past month.
• 47% of advisers place their secured loan business with a mix of two to five lenders, with 18% placing business with 10 or more lenders.
• 80% offer either monthly premium PPI or a choice of monthly or single premium. 20% do not offer PPI at all.
• Only 1 in 10 are currently members of FISA. (The Finance Industry Standards Association is the voluntary self-regulatory body operating in the secured loans market, with membership comprising both lenders and brokers).
Robert Sinclair, director of the AFB, said: “In recent years mortgage brokers have been saying that they want, or intend, to become more involved in offering secured loans. This review shows it is now happening.
“Mortgage brokers are increasingly using secured loans as an appropriate part of their advice to customers. It is also good to see that in many companies this is seen as a specialist area and they are encouraging specific individuals to focus on this sector. This should ensure that the customer receives good quality advice.
“It is encouraging to see that most have advised in this area in the last month, so are active in the market using of a wide range of lenders. We know this is driven by the circumstances of the borrower and ensuring the best deal for them.
“However, mortgage intermediaries are not as comfortable with single premium payment protection insurance (PPI) as specialist secured loan brokers. This raises questions for both groups.
“Very few of the mortgage brokers have taken up FISA membership, which does not seem to be a barrier to them writing business. We will continue to monitor how this sector develops and offer guidance and support to members of the AFB.”
