According to research by the Association of Finance Brokers (AFB), 88 per cent of respondents voted that the customer was the client of the broker even after the mortgage had been ‘introduced.’ The results were welcomed by the AFB, but in turn it warned that brokers needed to ensure that the relationship was in the best interest of consumers.
The AFB also called for a 12-month period where a lender could not ‘market’ the client to allow the broker to forge a relationship. Recent publicity surrounding alleged ‘client snatching’ – where a lender makes a decision to increase the amount of a loan following a discussion with a customer – had increased focus on the issue of who was responsible for the client relationship.
Robert Sinclair, director of the AFB, said: “The issue of who owns the customer is at the heart of many regulatory revisions and Ombudsman decisions. Brokers should take care to ensure they understand these issues fully as they go wider than purely regulatory requirements and are based in law.
We encourage all brokers and lenders to agree a period where the lender cannot ‘market’ the client, for say 12 months, to allow the broker to forge a relationship. The broker must accept responsibility to develop that relationship via face-to-face meetings, phone calls and other communications.”
Simon Webster, managing director at Facts & Figures Financial Planners Ltd, said: “We’ve seen this in financial advice where there is no other vehicle to go through for business. Clients remain the brokers’ but lenders don’t see it that way.”
