Understanding the Intermediary Market

How UK mortgage distribution really works

Sara Palmer / Sales Director

The Big Picture
87%

Of UK mortgages go through intermediaries

Intermediated
13% Direct
91% Buy-to-let is even more intermediated
13% Direct: product transfers, execution-only, no capital raising — customers who already know what they want
Two Routes to Market

DA vs AR

Two fundamentally different ways a broker can operate

DA
Directly Authorised
FCA authorised & regulated directly
  • ✓ Holds own FCA permissions
  • ✓ Full responsibility for conduct & compliance
  • ✓ Trades under own regulatory licence
  • ✓ Advisers are employees or contracted individuals
AR
Appointed Representative
Operates under a network's FCA permissions
  • ✓ Network holds FCA authorisation
  • ✓ Network provides compliance oversight
  • ✓ Access to technology, lender panels, training
  • ✓ Network charges via proc fee split or monthly fees
The Trade-Off

Freedom vs Support

Why would a firm choose one route over the other?

DA
Freedom
  • ✓ Full control over products & lender panel
  • ✓ Move fast — adopt a new product, your call
  • ✓ Suits larger, established or specialist firms
You bear all compliance cost and risk yourself
AR
Support
  • ✓ Compliance handled for you
  • ✓ Lower barrier to entry, lower ongoing cost
  • ✓ More time selling, less time on red tape
You're governed by your principal's rules and appetite
⚠ The interest-only example: If the regulator says it's OK, a DA broker can sell it with advice. But some networks are still nervous — they impose stricter rules, limiting what their ARs can do.
↓ 17.2% DA retail advice firms since 2020
↑ 11% Mortgage-only DAs grew (specialists staying independent)
The AR Chain

Layers Within Layers

Quilter
Principal firm · FCA authorised
Regulatory responsibility
Lifetime Mortgages
Network · AR of Quilter
Recruits & supervises
Curchods Mortgage Services
Member firm · AR of Lifetime Mortgages
1
Quilter holds the FCA authorisation — responsible for every AR beneath it, however deep the chain goes
2
Lifetime Mortgages recruits and supervises AR firms like Curchods Mortgage Services, providing compliance oversight and tools
3
Curchods Mortgage Services operates under Quilter's umbrella — their product choices are shaped by rules set layers above them
Walk In Their Shoes

Two Very Different Lives

The same job title, but completely different day-to-day realities

DA Broker
  • → They chose independence — and carry the weight of it
  • → Compliance is on them, every day, at their own cost
  • → But when they like a product, they can use it tomorrow
They value speed, directness, and being treated as a peer
AR Broker
  • → They traded some freedom for support — less red tape, more selling
  • → They might love our product but can't use it until layers above say yes
  • → Delays aren't lack of interest — they're structural
They need us to help them make the case internally
💡 Real example: An AR broker wants to place interest-only cases with us. But their network is still nervous — stricter rules than the regulator requires. That broker is stuck, and it's not their fault.
Mortgage Clubs

The Hidden Power Brokers

⚖
Access & Exclusives
Tiered membership levels — higher tiers unlock exclusive products and lender access not available elsewhere
📣
Marketing & Sales
An extension of lender's own marketing — they earn it via a thin slice of the proc fee
💻
Tech & Systems
CRM integrations, sourcing systems, and broker tools at reduced cost or free
📚
Lender Panels
110+ lender panel access, help desks, field relationship support, and training
1 in 3
intermediated mortgages go through L&G Mortgage Club — the largest in the UK
Free to join for DA firms. Brokers can belong to multiple clubs and cherry-pick the best rate per lender.
The Full Stack

Why Every Layer Exists

Each layer adds genuine value — follow the money and you'll see why the structure exists.

DA Route
🏦
Lender
Pays gross proc fee
0.35%–0.50% of loan
★
Mortgage Club
Aggregation & negotiation
Retains 2–5 bps
👤
DA Broker
Own compliance, full control
Keeps ~95%+ of proc fee
🏠
Customer
AR Route
🏦
Lender
Pays gross proc fee
0.35%–0.50% of loan
★
Mortgage Club
e.g. L&G · Aggregation
Retains 2–5 bps
🔗
Network
e.g. HLP · Compliance & oversight
Retains 10–25% · FCA responsibility
👤
AR Broker
Advice & customer relationship
Receives 75–90% of proc fee
🏠
Customer
Packagers also exist in specialist/adverse space — another layer of payment and sometimes advice. We don't operate there.
Key Players

Names You Should Know

Networks

St. James's Place 2,776 ARs
PRIMIS 1,049 ARs
Stonebridge 707 ARs
Quilter 686 ARs
Openwork 566 ARs

Mortgage Clubs

L&G Mortgage Club ~1/3 of market
Paradigm Mortgage Services
SimplyBiz Mortgages
TMA Club
Brilliant Solutions
9,689
AR firms across all networks
16,248
Advisers with mortgage permissions
The Takeaway

Being a Great Partner

Same goal, different approach — depending on their set-up

If They're DA
Speed
They can act on a new product tomorrow. Be ready for that.
Independence
They chose to go it alone. Treat them as peers, not a channel.
Range
Product breadth is what keeps them coming back.
If They're AR
Patience
Silence doesn't mean no. It means layers.
Arm Them
Give them what they need to sell it upstairs.
Volume
When a network says yes, hundreds of brokers follow.

The Market is Shifting.
We Need to Shift With It.

Next time you speak to a broker, ask: are you DA or AR? Which network? Which club?
It changes everything about their experience — and how we can best help them.

↓ 17.2%
DA retail advice firms since 2020
↑ 11%
Mortgage-only DAs grew
16,248
Network advisers