The Intermediary – July 2025 - Flipbook - Page 54
S E C O N D C H A RG E
Opinion
How to obtain max
value for second
charge clients
W
hile second
charge business
volumes
continue to
gather pace, I
believe there is
still no time for complacency. Every
lender, broker and stakeholder in
the sector is commied to growth, as
we are seeing a wider acceptance of
second charge mortgages across the
intermediary channel. But the task
of fulfilling the potential of the sector
will not be won if we sit back believing
that the job is actually done.
In the past, there was a time when
master brokers – packagers – were
the main, and in some cases the only,
conduit for accessing second charge
lenders. However, in the past few
years more lenders have opened their
doors to direct business.
Working with lenders
Today, advisers are tasked more than
ever with ensuring that customers
are given recommendations based
on thorough analysis of the products
and pricing that most closely match
their needs. How they reach that
recommendation is based on a
mixture of industry knowledge,
experience and the way advisers
choose to si all the information they
gather to reach a conclusion leading to
a specific recommendation.
Of course, sourcing systems
are an indispensable aid for every
mortgage broker – technological
advances have simplified the sorting of
lending options.
However, the more complex a
client’s individual circumstances, the
more likely that advisers should make
use of specialist distributors to provide
a finer level of sourcing for second
charge choices that sourcing engines
cannot yet match.
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The Intermediary | July 2025
Advisers are time poor and are
having to si through masses of
lender information, a lot of which
is hard to find, and yet so much of
the heavy liing can be done by
exploiting the resources provided by
specialist distributors.
They not only help to educate
advisers about second charge
mortgages and the wider specialist
lending sector, but also convert
many practitioners to the concept of
making more use of their experience
and human expertise, backed by
their broad based panels and close
relationships with those lenders.
If I was a broker coming to second
charge for the first time and used to
dealing directly with mortgage lenders
for most of my first charge needs, I
would like to know that, if I wanted
to, I could deal with a second charge
lender directly – but the question I
would ask is, would I want to?
While barriers to entry are being
dismantled for the sector to grow,
education remains a priority. Part of
that education means helping new
introducers to understand that they do
have a choice as to how they can access
second charge lending. Whether they
choose to use it, is up to them.
The role of distributors
What I would say to all brokers is that
they should assess the advantages
and disadvantages of direct contact
as opposed to using a third-party
specialist distributor. For brokers with
the luxury of a backup team to make
the string of individual enquiries to
each lender in order to come up with
a genuine recommendation based
on rate, service and suitability to the
client’s needs, then going direct can
work well for them.
However, my question to brokers
working on their own and without the
LAURA THOMAS
is regional sales manager
at Equifinance
There is a real
advantage in having a
specialist distributor’s
resources, which includes
access to all the major
lenders in the sector”
benefit of a researcher or paraplanner,
is how much time do they really
have to make that kind of assessment
before making a recommendation?
I would suggest that, because of the
need to research further advances and
remortgages as well, the answer in
many cases would be ‘not much’.
More lenders are likely to offer a
direct route, but for the majority using
a third-party to provide origination,
communication and the all-important
preparation of the application, there
is no real business case to make the
change.There is a real advantage
in having a specialist distributor’s
resources, which includes access to all
the major lenders in the sector.
Their knowledge of lenders’
individual requirements and the
option, should I choose it, to provide
my client with a full advice service,
would leave me free to concentrate on
new business, and therefore makes a
most compelling argument. ●
