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Brokers - how important is a lender's brand?

Journalist: John Fitzsimons, Freelance

ended 21. February 2023

With the news that Tesco Bank is potentially being sold off, we would love to get your thoughts on how important lender branding is.

  • Is the advice process easier if you can recommend a name that the client is familiar with?
  • Do you ever encounter wariness from clients if the recommendation is for a lender that they've never heard of? How do you counter that?
  • Does the demise of Tesco as a mortgage lender tell us anything about whether branding really is important for borrowers?

Any and all thoughts on this are very welcome

4 responses from the Newspage community

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Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
Brand recognition for lenders is not as important as it once was. Clients are more concerned with finding a cost-effective solution to their financing needs, particularly in the current economic climate. Most people are aware that mortgage lenders must adhere to certain standards and take comfort in this. At the end of the day, money is money.
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Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Brand is very important to a majority of clients and they are wary when a company they haven't heard of is recommended to them. That said, the demise of Tesco Bank has nothing to do with its brand, it's the shambolic proposition it holds and its lack of clarity over who its customer is.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
In the broker mortgage space, we have many lenders with little to no direct-to-public offering, for example, Accord, Platform and Pepper Money to name just three. I have no issue with clients accepting my recommendation if a lender they have never heard of is proving to be the best deal for them. Of course, the fact the client is taking the money from the bank, rather than giving them their own money to save may be part of that. A bank's brand is maybe more important in the savings market than in the mortgage market. The only exception to this will be when a brand builds up a negative public perception; there's very good reasoning behind why Virgin Money and NatWest are the brands still in the market, as opposed to Northern Rock and Royal Bank of Scotland.
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Anil Mistry
Director and Mortgage Broker at RNR Mortgage Solutions
Yes, it's easier for you to recommend brands that the client knows of. However, if you have built trust with the client, then it doesn't matter which lender is recommended. I once recommended Digital Mortgages to a client, and they asked me who they were because they had never heard of them. I explained that this is the cheapest lender overall, but in addition to this, the trust that I had already built with the client helped them accept Digital Mortgages. So, building that trust is vital and it will then make it easier for them to accept the smaller lender.