Abbey for Intermediary’s (AFI) retention strategy of approaching customers and offering fee-free early release with no redemption penalty from fixed rates with a two-year tracker at 1.99 per cent over base rate has been slammed by a broker.
The broker said: “At most LTV ratios, this scheme is unbeatable. Whether the scheme is suitable for the client is a whole other issue."
“Needless to say, the introducer is completely sidelined in this process,” said the intermediary who wished to remain anonymous because, he said, he “needs Abbey’s products.”
The Santander-owned intermediary brand defended its move to hold on to its customers and said maintaining the balance between new and old business calls for an effective retention strategy. In an email to the broker AFI said: “Our ‘Switch now’ existing customer mailings are only sent to customers within the last four months before maturity. All the rates that we offer on retention are specific to their individual circumstances, and any special offers are likely to be available for a limited period only.
“Although we do not pay procuration fees for mortgage retention we understand that it is important for your business that you are able to maintain your ongoing relationship with the customer during the retention transaction. For this reason, all the retention mailings we send out to customers actively encourage them to contact their intermediary to seek advice,” said the letter.
The response continued that it aimed to help brokers retain their own clients with a product helpline and a new website section called ‘Existing Customers.’ [Click to view here]
The broker said: “Abbey’s strategy is completely clear. They have no regard whatsoever for the intermediary-client relationship. They take the view that once a mortgage has been placed with them, the client is no longer the intermediary’s client and they will do whatever they need to do, to ensure that they retain the business at the intermediary’s expense.”
He added that this approach is not illegal in any way but called it “morally reprehensible.”
“To dress this up as a “demonstration of commitment to the intermediary market” is risibly hypocritical,” he added.
An Abbey for Intermediaries spokesman said: “As part of our ongoing retention programme we are contacting a selected number of our mortgage customers to offer them the opportunity to stay with us if the deal is right for them.
“It is prudent for us to contact mortgage customers to ensure that they are aware of the current low rates on offer and we have been very open with intermediaries about this approach. Following intermediary feedback we have taken steps to find a middle ground whereby we have included a line in the letters about how customers may wish to consider seeking independent financial advice. For a lender to say this to its customers is almost unheard of and our approach demonstrates the fact that we do not wish to alienate our intermediary customers.
“Those customers with strong relationships with their intermediary will doubtless continue to go to them for advice on renewal, but for those that don’t it is important that we remind them of the opportunities of remaining with one of the most secure and most competitive lenders in the market. Abbey remains committed to the intermediary market.”
Comments
re Abbey Retention Strategy.
Abbey poor services standards will be now GRIND DOWN THE direct customer who deal direct with them. Many abbey customer I deal WHO experiencing first hand ABBEY mortgage Processing are ready to hang themselves- THEREFORE FELLOW BROKERS DONT BE WORRIED THEY COME BACK TO YOU WITHIN A FEW WEEKS.
Back in 1983 I arranged my first mortgage, for a client, with Alliance and Leicester. Guess what I earned no commission didn't charge the client a fee and the Ally & Leic branch manager tried to nick the life assurance I had arranged. So there you go nothing changes.
Dont Forget when all this Chaos ends the Lenders will be all over us to use their Products .I say we the Brokers wont forget their attitude to us and when some normality returns i have some lenders that i will not be using and i feel there are many like me .So come on you Lenders do your worst because the Boot wont always be on your Foot just wait and see
Tricky Oakey and Shabbey have about as much respect in the industry as the directors of Mortgage Times
It's funny how it becomes easy to avoid a lender once you set your mind to it. I do have to use them from time to time, but ONLY if it is demonstrably best for the client taking into account service problems, long term rate, TCF issues etc
I haven't used Abbey for 12 months now. They were my preferred lender but with no retention strategy or cdompassion for Broker Support - it has proved the right decision on our part. I would encourage other brokers to vote with their business too
Why do they take such a short term view?
When the market returns to normal why would any broker want to write business with Abbey?
If brokers stopped writing business for a couple of months via Abbey it might make them think.
Stop putting business to them. Simple as that.
Until we as intermediares hit them where it hurts it will continue to happen and they will continue to get away with it.
The Abbey state that they are retaining the Abbey brand for intermediaries. So why can this lender, along with others, not get it into their thick skulls that the cheapest and most profitable way of obtaining business is to target the broker market, both for new business and retentions. Maybe the payment of a retention fee together with copy correspondence would benefit all. Abbey, why don't you take a leaf out of the Halifax book?
For us a lender of last resort. Why can't everyone one be like ther Coventry BS - advance notice of changes, advance notice of rates expiring. Great service, will always get our business where we can. For them to win an award last week just adds a level of salt to the already inflamed wounds the Brokers have. WHO voted for them????
I wouldn't use them any more, on the basis that they may not offer value for money over the whole term of the mortgage
I totally agree with the comments made by this Broker. I have tried to address this issue with the Abbey and emailed Mr Okey on it. He read the email but did not have the decency of replying. We lost 12 clients to the Abbey in January, a great start to the year! They are basically biting the hand that feeds them.
It appears that it is Abbeys (Santanders) long term plan to push the intermediary out of the market. They happy to take the initial application from us and then squeeze us out. I, for one, will not be doing business with Abbey unless they are the only option!
This isnt new, some 12 months ago I had the same issues with Abbey. Having spoken to Steve Best whom at the time was Head of Mortgage Development, he advised that the practice was to be stopped due to the reaction from brokers. They say that they only send letters to clients with less than 4 months remaining, complete tosh !! I had a client with over 12 months left and they were offered a fixed nearly 2% less than their current deal , with all fees waived. At least other lenders tell you when they are going to shaft you !!