MSE News: Tesco to sell mortgages

Former_MSE_Guy · 3 August 2012 at 4:53PM

"Tesco Bank will start to sell mortgages from Monday in the supermarket giant's latest foray into financial services ..."

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Tesco to sell mortgages

Pincher · 4 August 2012 at 10:44AM

Oh dear, I'm already queueing for ages because two clerks and a manager is hogged by by a complaint, so only one clerk is serving behind the cigarette/lottery counter.

dunstonh · 4 August 2012 at 11:09AM

Whilst another lender is good thing, Tesco financial products havent exactly been good value in the past. Often they use Tesco points to sell white label products that are cut down versions of the main version and at the same or higher price. It appears the launch products on this scheme are not bucking that trend.

Their product wont be available via whole of market advisers (as it is nil commission) but will be available for independents to recommend (as independents do not keep commission where it is paid but refund it to client). Although the terms are such that an independent would not likely recommend them.

ACG · 4 August 2012 at 5:40PM

Just getting into the market as an advisor i was a bit worried about this, i have been dreading it ever since first hearing about it.

It doesnt seem like they want much business at the minute. Having worked for RBS in the past (who run their credit cards...or used to anyway), a lot of tesco customers are only interested in the points...even if technically its not great value.

I think if they decide to throw their full might behind this it could put some brokers out of business.

But, because:
- you cant apply in store,
- theyre not market leading rates by any stretch,
- and theyre not opening up to advisors to sell their products,
that theyre not really interested in mass market applications at the moment.

Quite a low key launch really when i was expecting something a lot bigger.

Thrugelmir · 4 August 2012 at 5:45PM

ACG wrote: »

Quite a low key launch really when i was expecting something a lot bigger.

The retail banking sector may undergo a significant change in the next 10 years. With new providers taking business away from the major players.

ACG · 4 August 2012 at 5:56PM

Anything could happen and im sure a lot will. Having wanted to be a mortgage advisor for the last 7 years and finally getting into the role i dread to think how things could change for the worse.

However, im sure Asda and M&S will enter the ring at some point among others. Whatever will be will be i suppose.

Thrugelmir · 4 August 2012 at 6:04PM

ACG wrote: »

finally getting into the role i dread to think how things could change for the worse.

In any facet of business. The professional service providers will survive. Mortgage broking attracted its fair share of cowboys in the boom years. There'll always be a niche market. Given the poor standard of financial literacy that's evolved more recently. So some people will require guidance and assistance.

M&S have already hooked with HSBC to provide current accounts. Though all the accounts carry monthly fees.

Wouldn't be surprising to see a resurgence in building societies at a local level. Given that mortgage lending as a whole isn't highly profitable to the major banks.

callum9999 · 4 August 2012 at 7:32PM

What exactly are they waiting for before launching a current account? While I'm sure the process could be greatly improved, there is nothing really wrong with the current one.

marathonic · 4 August 2012 at 7:48PM

If Tesco launched with market-leading rates, surely their underwriters would be inundated with applications.

I'm no mortgage professional but have a little bit of a business head. Surely, it's better to launch with rates that are a little higher, cherry-pick whatever applications you do get and then start lowering your rates as your underwriting criteria gets a little more tweaked.

With the financial power Tesco have behind them, I'd see this as their plan - looking at it from an outsiders point of view.

dunstonh · 4 August 2012 at 9:39PM

Having wanted to be a mortgage advisor for the last 7 years and finally getting into the role i dread to think how things could change for the worse.

Just move towards independent status and away from whole of market. Start by giving people the choice and explain it without bias. You will be surprised just how many people will choose independent over whole of market once they realise the difference. However, until explained they would go whole of market. Maybe try your next few cases by using the non-commission payers as well and cost them over the term of the deal and see how they compare (do it behind the scenes so you can see the difference for yourself before you try it in the real world).

Tesco have been in the protection and pension market for over a decade. Didnt create a ripple. Poor quality products and not cheap pricing. Typically bought by those that wouldnt seek advice anyway and those that didnt realise they were buying poor value.

ACG · 5 August 2012 at 1:07AM

Im still quite new in advising. Not sure how to get from WoM to Independent, im sure at some point it will come i just need a bit more time i think.

MSE News: Tesco to sell mortgages

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