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Kicking off the mortgages, protection and business development track of Financial Adviser Expo in London last week, Stephen Smith, director of housing for Legal & General, said lenders had not planned to dual price to the detriment of intermediaries.

His view was shared by John Malone, managing director of Premier Mortgage Service, who told more the hundreds of advisers gathered at the Queen Elizabeth II Conference Centre in Westminster that dual pricing had been a knee jerk reaction to HSBC's rate matcher deal.

Speaking during the mortgage panel debate, chaired by Emma Ann Hughes, editor of Mortgage Adviser, Mr Malone said: "When HSBC came out with its rate matcher deal that caused concern among lenders. If you were running the retail division of a high street bank then you must protect your core business.

"We were disappointed when procuration fees reduced and there was the disparity of a few basis points between their direct deals and intermediary deals. You could understand why people thought they had drawn together as a cartel but they had not.

"Dual pricing has a limited time to run. Every single lender tells me the amount of business that has come in through their branches has actually dropped in the last few weeks.

"There is more business being done through intermediaries than going through branches."

When asked why Nationwide had offered better deals direct than through intermediaries at the start of May, Larry Banda, head of specialist lending marketing for Nationwide, said "Was it a quick reaction to market forces? Yes, absolutely.

"No matter how much money you pump into advertising getting mortgages through your branch network, peoples' needs are best met by going to an adviser.

"I do not think it represents a long-term risk to advisers. I do not think it represents anything more than a short-term reaction to empty diaries in branch networks and an opportunity to advertise more appealing products to try and get cross sales up.

"It is not a strategic decision to try and force customers out of the intermediary market and into branches."

Steve Carruthers, senior corporate account manager for RBS Intermediary Partners, said: "What happened was probably more by default than design. Speaking on behalf of RBS we had to manage our service proposition and that was one way to do it.

"We have priced more competitively towards intermediaries in the last few weeks and that will continue."

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