Eight in 10 DAs offering seconds

Eight in 10 directly authorised advisers are advising on second charge mortgages themselves, research from specialist finance broker The Loans Engine suggests.

The firm, which collected data about the enquiries it received from DA firms this week, found that many advice firms are making seconds part of their offering to retain their ‘independent’ status.

The Mortgage Credit Directive came into force on Monday, bringing with it second charge mortgage regulation.

Ryan McGrath, chief executive of The Loans Engine, said: “Our initial research will undoubtedly surprise many within the second-charge master broker community who would have anticipated many more DA firms and advisers opting to introduce their clients on, rather than issue the advice and recommendation.

“We have always felt that in the DA space there would be many more firms who would feel uncomfortable referring their client on and would instead opt to deliver the advice, whilst utilising a master broker like ourselves who are able to deliver in terms of packaging the case.

“We have certainly found this option proving incredibly popular and our decision to gear up our resources in the ‘package-only’ space has proved prescient because of this.”

He added: “The lure of maintaining ‘independence’ appears to have proved incredibly strong, as has being able to deliver a whole of market offering, and DA firms are clearly not going to give up on this lightly.

“We suspect that because of this, DAs – who after all will be able to work with whomever they wish unlike most network AR firms – are actively looking to use master brokers who have the necessary resource, experience and skill-set to be able to offer a quality packaging service.

“It is of course very early days under the new regime but we would certainly urge those DA firms who want a package-only service to contact us in order to see how we can best support the option they have chosen.”