Brokers have hit out at TSB for delaying the launch of its product transfer service, saying this would lead to the bank effectively taking over clients looking to switch products in the wake of the base rate rise.
Following the Bank of England’s base rate rise at the beginning of August, TSB announced it will increase interest rates on its variable rate mortgages by 0.25 percentage points at the beginning of September.
Advisers believe this could prompt their clients to look for better deals, which they will be unable to facilitate.
Currently, a broker must refer TSB clients directly back to the lender to transact a product transfer - thereby removing the broker from the client process.
And although TSB has already announced its new broker product transfer service Rate Switch, which will solve this issue, it has repeatedly delayed its launch.
For some clients a product transfer is the only viable option if a change in income or lending criteria alterations prevent remortgaging with another lender.
Martin Stewart, director and founder of London Money, said the current system undermined the broker’s role in the mortgage process and threatened both an adviser's reputation and income.
He said: "A broker will work hard to acquire and maintain a relationship with clients, only for them to be handed directly to TSB whereby the lender will benefit from the broker’s hard work.
"As an adviser, you are only as good as the last mortgage you recommend - if a client is having to ask if you are still their adviser after referring them back to a lender, that threatens the working relationship."
Mr Stewart said he had been told by several TSB business development managers over the past year that a product transfer service would soon be delivered.
He said: "We have been told to bear with them while they prepared for launch, hold on while they have teething issues and to trust them as they want to support the intermediary market - so we lodge new business with them in good faith and yet here we are two years later none the wiser as to whether any of the above is true."
Mr Stewart said he has two TSB mortgages up for renewal in the near future, each at a value of £500,000.
Another broker, who wishes to remain anonymous, thought further delays to broker transfer capability will see lenders take marketshare away from advisers.
He said: "It is a great concern that a lender is struggling with part of their product offering - I have to ensure that a client has access to the most cost effective product or service provider with my recommendation.
"I also need to ensure that I can look to retain a client with that lender should circumstances prevent any other lenders being available - ultimately, I am the one responsible for the client’s mortgage moving forward."
Sebastian Riemann, financial consultant at Libra Financial Planning, believed the delay was being caused by extra precautions put in place to avoid any IT issues post-launch, akin to the problems TSB had faced with its internet banking in April.
The issue had prompted the Financial Conduct Authority to launch an investigation into TSB.
But he said: "I am somewhat more grateful that TSB are actually investing in a new system, unlike other lenders who try and patch up old outdated systems or worse, do nothing at all."
A TSB spokesperson said: "We would like to apologise for the delay in launching our product transfer capability for brokers and would like to thank them for their continued support while we progress this.
"We are totally committed to providing our brokers with the best service possible and giving them access to product transfer capability as soon as possible is a part of that."
On Monday (13 August) after being approached by FTAdviser, TSB emailed brokers to apologise for the "longer than anticipated" switch and to reassure the service was very close to launch.
rachel.addison@ft.com
