How Lenders’ New Freedoms are Undermining Client Relationships
Richard Howes
11 December 2025Can we expect lenders to try and tighten their grip on borrowers at their advisers’ expense in 2026?
Many advisers will have seen signs of this shift, but the pace is now hard to ignore. With all banks/lenders having their own apps, what does this mean for a mortgage adviser in today’s fast-paced world?
An app allows the lender to reach their customers not only early but consistently, sometimes months before an adviser can act, and with no mention of independent, professional advice or the professionals that offer it.
Via the app, lenders can push mortgages to those who don’t have them, and promote direct product transfers (PTs) to those that do, offering up the clear sense that the borrower can sort everything out in a few clicks. As mentioned, at no point do they advise the customer to speak with an adviser upfront, or the original adviser who placed the loan.
A BIG DEAL
This is not a small deal. As we know, when it came to existing borrowers, once the advice interaction trigger was removed, the door opened for lenders to move faster and with fewer limits.
Now, with the mortgage Discussion Paper pointing to potentially wider freedoms for the big lenders and a seeming willingness to accept AI ‘advice’ as legitimate, it seems the direction of travel is firming up.
Lenders have more scope to act first, urge the customer to do it themselves, and to make no reference to advice or the potential for poorer outcomes and lost protections this could entail. Also, data shows that once the broker’s client engages with a lender directly, they rarely, if ever, return to the adviser for future transactions. This is a real threat for advisers and one that is likely to solidify through 2026 and beyond.
FOUR-FOLD RISK
So what are the risks we are seeing via lenders’/banks’ apps? The first risk here is in terms of timing. While an app pushes a renewal six months early, an adviser can only access the product transfer channel at three/four months, so the lender has already tried to shape the outcome.
If adviser-client contact is left too late, or not at all, don’t be surprised if there is doubt in the client’s mind about the need to use you again.
The second risk is the route the lender uses. Apps allow banks to engage with borrowers via an array of prompts that sit beside the customer’s daily spending, savings updates and push alerts.
Advisers have to try and compete with this level of contact with ongoing, regular comms tailored to individual needs and well in advance of any potential mortgage change.
The third risk is dual pricing. We might have thought its days were numbered, but that unfortunately is not the case; we’re already seeing an increase across a number of lenders. Level playing field this is not.
If a lender offers cheaper rates on a direct basis, even for a small number of products, it signals how they want to secure business. Add exclusive lines for certain restricted groups, and advisers might find themselves locked out while their clients are pushed towards these deals.
The final risk, as I see it, doesn’t even sit with existing borrowers; it actually sits with potential first-time buyers who might have an app.
If they download a banking app long before they seek a home loan, they may be steered into an execution-only path without ever speaking to an adviser. That is a concern, given how important the need for guidance is at the start of the homebuying process. It’s why we support a rule change that introduces mandatory advice for all first-time buyers.
TIME FOR ACTION
In all of the above scenarios, advisers are of course not powerless, but they do need to act and potentially adjust what they’ve been doing in order to deal with growing direct-to-consumer activity.
You should speak to clients far earlier and much more regularly in the cycle. If lenders are targeting borrowers six months out, don’t wait until month four to raise the issue of renewal. Check-ins prior to this set the right expectation and keep you in the conversation.
You should make clients aware of how these apps work.
Many borrowers do not realise that a simple tap can start a process that bypasses advice. Advisers should outline the potential consequences of this, not least in terms of only having access to that one lender’s product range and ending up with the wrong product, let alone the lack of Ombudsman and FSCS access.
Issuing a clear line in every communication – “Contact me before you accept anything from your lender” – can make a difference.
STRONGER ONLINE PRESENCE
You should build a stronger online presence. If clients ask questions through search or AI tools, advisers need their voice to show up.
That may be through better site content, short news posts or clear guides that feed into these systems. When customers look for help, the adviser’s answers should be the first they see.
You should watch for signs of direct activity from lenders. If a bank moves early or pushes new direct-only products, advisers need to feed that insight into their approach.
This is a moving space, and advisers who stay alert will have a clear edge.
OUR ROLE
As 2026 approaches, advisers will need to assume lender direct activity will continue and probably strengthen.
The mix of app-based contact, new freedoms in the rules and more direct-only avenues to pursue mean the adviser’s place at the client table will increasingly come under threat.
However, with early action, regular and clear client messages and support from distributors like ourselves, advisers can hold their ground and keep sight of their client relationships.
