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Brokers criticise NatWest of not acting in the interests of consumers as lender allegedly dual prices

ended 26. September 2023

Brokers have criticised NatWest for allegedly offering a sub-5% 60% loan-to-value 5-year fixed mortgage rate direct to consumers — available online on an execution-only basis — that isn't available via brokers, saying the move is “short-sighted" given that people, in the current market, need advice more than ever. They added that dual pricing may be “incompatible with our commitment to Consumer Duty”. They said there is a 15 basis point difference between the direct deal being offered by NatWest online and the cheapest brokers have to offer at 5.14%, excluding green mortgages.

Riz Malik, director of Southend-on-Sea-based independent mortgage broker, R3 Mortgages, was withering: “Is NatWest really rewarding people for not taking advice in this day and age? Considering that this is a time when people need advice the most, I find this tactic short-sighted. It's not in the interest of consumers nor in the spirit of Consumer Duty."

Ranald Mitchell, director of Norwich-based independent mortgage broker, Charwin Private Clients, went one further, calling the practice “disgusting”: “This is a disgusting practice that NatWest have been guilty of in the past. They are not alone. They send their representatives around our businesses with the message, 'We value brokers', and then continue to undermine the crucial service brokers offer with cheaper rates directly.”

Craig Fish, Managing Director at London-based mortgage broker Lodestone, agreed: “Really? I thought we had moved beyond this underhanded tactic nowadays. NatWest, you should know better. Dual pricing has to stop, and the regulator needs to do more.”

Graham Cox, founder of the Bristol-based broker, Self Employed Mortgage Hub, also suggested the regulator should step in: “Dual-pricing should be banned. It's unethical not just for brokers but consumers as well, who should reasonably be able to expect the rates a broker sources to be the best available in the market.  Just another example of banks acting with impunity. It's high time the regulator bared its teeth.”

The views of Fish and Cox were shared by Lewis Shaw, founder of Mansfield-based Shaw Financial Services: “The FCA wants consumers to receive advice when taking out a massive amount of debt linked to their most valuable asset for over 25 years. So how does this fit with Consumer Duty and preventing foreseeable harm when many consumers are unaware of the implications and most won't truly understand the protections they're giving up when selecting an execution-only product?”

Darryl Dhoffer, founder of Bedford-based The Mortgage Expert, was also disappointed to see dual pricing make a return: “So the dark art of dual pricing is once again raising its head. I appreciate lenders have loan books to fill, but these practices are not acceptable. Lenders need to remember that nearly 90% of all mortgage business written is by intermediaries, in case they need reminding.”

Adam Smith, Founder at Northampton-based Alfa Mortgages, pointed out that dual pricing creates a Consumer Duty issue for brokers: “The concept of dual pricing appears incompatible with our commitment to Consumer Duty. It raises questions about the fairness of our offerings to clients, as rates differ depending on whether they engage directly or through an intermediary. This practice may inadvertently disadvantage financially inexperienced clients who choose the execution-only route, potentially exposing them to unnecessary risks.”

Steven Morris, director at Bristol-based independent mortgage broker, Advantage Financial Solutions, mirrored Malik's views that NatWest is being short-sighted: “This is awkward as, of all lenders, we have perhaps the best relationship with our NatWest BDM. But yes, this is a phenomenally short-sighted tactic that arrogantly sticks up two fingers to the relationship with brokers. Sorry, NatWest, but who provided you all that business during the recent market boom? Around 75% of it, if I have my numbers right? Ah yes, us brokers. Dingbats.”

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10 responses from the Newspage community

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Riz Malik
Independent Financial Adviser at R3 Wealth
Is NatWest really rewarding people for not taking advice in this day and age? Considering that this is a time when people need advice the most, I find this tactic short-sighted. It's not in the interest of consumers and in the spirit of Consumer Duty.
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Ranald Mitchell
Director at Charwin Mortgages
This is a disgusting practice that NatWest have been guilty of in the past. They are not alone. They send their representatives around our businesses with the message, 'We value brokers', and then continue to undermine the crucial service brokers offer with cheaper rates directly.
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Craig Fish
Director at Lodestone Mortgages
Really? I thought we had moved beyond this underhanded tactic nowadays. NatWest, you should know better. When you consider that most mortgages are sourced via the broker channel, I'm not entirely sure what NatWest is trying to achieve. Furthermore, considering they are closing branches across the UK throughout 2023 and 2024, do they honestly think they could handle the demand from the customer? Dual pricing has to stop, and the regulator needs to do more.
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Michelle Lawson
Director at Lawson Financial
We have to be careful with this as many lenders have dual priced and ever since I can remember. I am not saying this is fair, though. It also surely breaches Consumer Duty. Sometimes, this has been to the broker's benefit, with better products or exclusives available through brokers only. There will have been instances in the past where customers go direct to a lender, don't get any whole of market advice and don't get the best product. The options are there for any customer to research their mortgage how they wish however the broker route will assess their criteria, the best option for them at the time and, more importantly for now where the rates are reducing, review the product rate and change this to a better one should one be released.
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Darryl Dhoffer
Founder at The Mortgage Geezer
So the dark art of dual pricing is once again raising its head. I appreciate lenders have loan books to fill, but these practices are not acceptable. Lenders need to remember that nearly 90% of all mortgage business written is by intermediaries, in case they need reminding.
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Peter Stamford
Mortgage Expert at Stamford Home Finance
This practice cannot be allowed to continue, otherwise our industry will have to take aggressive action against NatWest to protect itself and our customers.
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Graham Cox
Director at Bridging Hub
Dual-pricing should be banned. It's unethical not just for brokers but consumers as well, who should reasonably be able to expect the rates a broker sources to be the best available in the market. Just another example of banks acting with impunity. It's high time the regulator bared its teeth.
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Steven Morris
Advising Director at Advantage Financial Solutions
This is awkward as, of all lenders, we have perhaps the best relationship with our Natwest BDM. But yes, this is a phenomenally short-sighted and amnesic tactic that arrogantly sticks up two fingers to the relationship with brokers. Sorry, Natwest, who provided you ALL that business during the recent market boom? Around 75% of it, if I have my numbers right? Ah yes, us brokers. Dingbats.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
It's always very disappointing when someone you see as your business partner goes behind your back like this. Over 80% of all new mortgage business is generated by brokers, so lenders are very dependent on the intermediary channel, however, they also know that we are very unlikely to not recommend our clients a NatWest mortgage if it is the best overall deal for them, essentially using our own integrity against us. The worst part of dual pricing, though, is when a prospective client comes to a broker and gains all their knowledge and insight, then having been navigated through the hundreds of mortgage options to conclude that a certain lender is the best fit for their needs, only to lose the business as the lender offered a cheaper deal via their direct channel.
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Adam Smith
Founder at Alfa Mortgages
The concept of dual pricing appears incompatible with our commitment to Consumer Duty. It raises questions about the fairness of our offerings to clients, as rates differ depending on whether they engage directly or through an intermediary. This practice may inadvertently disadvantage financially inexperienced clients who choose the execution-only route, potentially exposing them to unnecessary risks.