Economic uncertainty and a stagnant housing market have led to the demise of Which’s advice arm, putting 53 adviser jobs at risk.
The company told FTAdviser yesterday (May 30) it is to review the future of its financial services arm and is looking to close Which Mortgage Advisers and Which Insurance Advisers.
It has since confirmed the proposed closures are due to market conditions which have changed for the worse and that the company needed to adapt to "remain fit for the future".
A spokesperson said: "It has become increasingly apparent that the Which Mortgage Advisers and Which Insurance Advisers businesses are no longer sustainable for Which in their current form.
"The market has changed considerably in recent years due to a combination of continuing UK economic uncertainty and a stagnant housing market."
The spokesperson also told FTAdviser the company had no plans to close or change any other part of its financial services arm, which includes guidance on savings and Isas and power of attorney services.
The mortgage advice section of the company, which was started in November 2010, has 53 advisers who give telephone advice out of its Bristol office for a flat fee of £499.
Which will now conduct a consultation with employees, thought to take between four and six weeks, and the firm stated no final decisions would be taken until this process has taken place.
The spokesperson said they were not in a position to say whether the closures would definitely go ahead and what that would mean for the advisers but said business would continue as usual until a decision was made.
Ray Boulger, senior mortgage technical manager at broker John Charcol, said: "Which started off as a fee-free broker, realised that wasn’t viable and hence moved to charging fees but presumably found it challenging to generate an adequate return.
"I think one of the challenges for brokers in the next few years, now five-year fixes have taken over two-year fixes, is there is going to be less remortgage and product transfer business. Flat purchase activity is also a trend that will continue making the market challenging."
Chief commercial officer for John Charcol, Luke Somerset, said it was always a shame to see a fellow broker leave the market, not least because of the impact the announcement would have on the many adviser at Which.
He added: "We expect the market to remain challenging for brokers who operate in the mainstream mortgage market, with flat purchase activity and increased competition in the vanilla remortgage sector set to continue."
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