Tackling barriers: The Protection Gap

AMI Senior Policy Adviser Stacy Penn discusses the Perception Gap in the protection market, in this article originally published in Moneyfacts…

The FCA in the insurance space – a more assertive regulator?

Following introduction of Consumer Duty, we have seen signs the FCA is shifting towards becoming a more assertive regulator…

The Perception Gap

AMI Senior Policy Adviser Stacy Penn discusses the findings from AMI’s latest Protection Viewpoint – The Perception Gap, in this article written for TMA Club…

Consumer Duty: The next steps – what does 2024 have in store?

On 6th December 2023, the FCA hosted a webinar titled Consumer Duty: The next steps – we draw out the key points of relevance to mortgage intermediary firms…

Your January update from AMI Chief Executive Robert Sinclair

AMI Chief Executive Robert Sinclair gives his January update, reflecting on the challenges and opportunities of the year ahead…

Deadline reminder for approvers of financial promotions for unauthorised persons

An important update from the FCA on the 6th February deadline for approving financial promotions for unauthorised persons…

Edit Content

Log in here for full access to all our great content


Please log in below with your username (which is your email address), using all lower-case letters.


Forgotten your password?
No problem, simply tell us you have forgotten your password to receive instructions instantly via email.

Having problems logging in?
If you are a current member but are unable to login, please first make sure you are using all lower-case letters for your username/email address. If you still have difficulties, please contact us via email at info@a-m-i.org.uk so we can rectify your problem.

Not a member?
Learn more about the benefits of becoming a member or apply online and we will be in touch.

The deep industry debate on procuration fees has 4 dimensions.  What we must all remember however is that these are commercial arrangements between firms and must be left in that competitive space.  It is important that individual lenders and intermediaries make their own judgements about the incentives and rewards needed to operate their risk based businesses.  But there are general issues that all firms need to recognise in their negotiations.

Firstly the interview and administrative work now undertaken by intermediaries, post MMR, has increased significantly and merits lenders paying more for the increased time and effort to deliver a fully packaged case.  Indeed the risks to the broker surrounding the advice and quality issues that can lead to panel suspensions or removal has raised the stakes considerably.  The bringing together of two parties, borrower and lender is a defined skill.  The lender argument for brokers to charge potentially VATable advice fees rather than a fair procuration fee for the exempt act of intermediation should be strangled at birth.

Secondly, the historic AR versus DA differential debate.  It is the same case from an on panel broker, therefore there can be no justification for any general differential.  If the lender decides to lend, then the introducer should be fairly paid and in our view created on real commercial arrangements, not based on spurious “spend on compliance” generalisations.  We have seen little evidence over the years to support any differential.

Thirdly, there can be no reason why a retention procuration fee should not be part of all lenders strategies.  It, retains customers, reduces their costs in transferring the loan and rewards the advice risk the broker carries when making the decision to stick.  I understand the bean counters fear, but it is just plain wrong that this is not industry standard.  Not all decisions should be driven by budgets.

Lastly, lenders need a profitable intermediary sector that can invest in technology to be here in the future.  Subsistence living that has been the post-crisis way cannot be our long term future.  This is the sustaining reason why the only way is up.


Forgot Password?

Join Us