Press
Mortgage Strategy 8th May 2006
Scottish Widows weighs up retention fees
Scottish Widows Bank has revealed it is considering introducing a retention fee for brokers.
Murdo McHardy, head of product development and marketing at Scottish Widows Bank, said, with many lenders suffering from poor customer retention levels, the market was moving more towards introducing retention fees.
He said Scottish Widows would make a decision in the next six months but, before considering any changes, it needed to be sure they fitted in with the broker's need to give best advice. He said: "Retention fees are something we have looked at – we are keeping a watching brief. We need to make sure we get our position right so there is not an issue with best advice."
Commenting, John Watson, operational director for corporate communications at Northern Rock, said it also had considered many options to improve mortgage retention performance for both customers nearing the end of the deal and borrowers moving home. He said: "Within these, we acknowledge brokers could provide one option open to us. It is one of a number of options."
James Carter, IFA at Virtue Financial, said customer retention was something an increasing number of lenders were looking at.
He said: "Woolwich has a scheme that is working very well. A retention fee does help – we are still giving advice and we are still taking on liability for that advice. It is certainly something more and more lenders will be looking to do."
Lloyds TSB is to market its international mortgage service through intermediary channels. The Own Overseas service, run and funded by Scottish Widows Bank, is for UK residents looking to buy property in Spain. McHardy said it could be extended to other countries such as France, Portugal and the US in the future.