We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Independent Mortgage Advisors or Not??
rpmortgage
Posts: 5 Forumite
It was interesting from a mortgage brokers point of view watching Martin Lewis appear on GMTV Tuesday morning 24th February 2009. He was talking about people that have fixed rate mortgage products and if it would be good advice to leave the fixed product and opt for a Tracker and he mentioned that it would be good to talk to a ''Whole of Market'' mortgage adviser.
Although the term ''Whole of market'' sounds like a customer would be getting Independent advice in 99% of cases they would not be!
Since the credit crunch there are more and more lenders that will offer customers a better mortgage product if they go direct to the lender and there are some mortgage lenders that do not pay a commision to mortgage brokers for placing mortgages with them.
We now have a situation where the majority of mortgage brokers are caling themselves ''Independent'' or ''Whole of market'' but they are not recommending the direct lender products to their clients or the products from lenders that do not pay them a commision, so how can they be 'Independent''.
Our company has been advising clients since 1996 and allways had pride in being able to call ourselves ''Independent''. When the credit crunch hit we had to change as we did not want to have a situation where we would sit down with a client and recommend a mortgage product for them to say that they had found something cheaper on the internet.
We now charge an upfront fee of £199.00 for our research and can now truly come back with the best products on the market for our custmers even if its a direct product. And we have managed to save one of our clients over £2,500 compared to another so called ''Whole of Market'' broker.
I guess what i'm trying to say is that unless a mortgage advisor is charging an upfront advice fee how can they be Independent, how could an advisor that does not charge a fee recommend a product from a lender that only offers mortgages to clients that go direct, they would earn no income and go out of business.
I have tried to contact Martin Lewis to discuss this but cannot seem to get hold of him, I do feel that Martin should make this clear to the public when he is on TV as he is efectivley recommending that the public speak to advisors that may not be truly ''Independent'' and in my clients case not saving them money actually the opposite.
Martin if your listening please contact us to discuss!
Although the term ''Whole of market'' sounds like a customer would be getting Independent advice in 99% of cases they would not be!
Since the credit crunch there are more and more lenders that will offer customers a better mortgage product if they go direct to the lender and there are some mortgage lenders that do not pay a commision to mortgage brokers for placing mortgages with them.
We now have a situation where the majority of mortgage brokers are caling themselves ''Independent'' or ''Whole of market'' but they are not recommending the direct lender products to their clients or the products from lenders that do not pay them a commision, so how can they be 'Independent''.
Our company has been advising clients since 1996 and allways had pride in being able to call ourselves ''Independent''. When the credit crunch hit we had to change as we did not want to have a situation where we would sit down with a client and recommend a mortgage product for them to say that they had found something cheaper on the internet.
We now charge an upfront fee of £199.00 for our research and can now truly come back with the best products on the market for our custmers even if its a direct product. And we have managed to save one of our clients over £2,500 compared to another so called ''Whole of Market'' broker.
I guess what i'm trying to say is that unless a mortgage advisor is charging an upfront advice fee how can they be Independent, how could an advisor that does not charge a fee recommend a product from a lender that only offers mortgages to clients that go direct, they would earn no income and go out of business.
I have tried to contact Martin Lewis to discuss this but cannot seem to get hold of him, I do feel that Martin should make this clear to the public when he is on TV as he is efectivley recommending that the public speak to advisors that may not be truly ''Independent'' and in my clients case not saving them money actually the opposite.
Martin if your listening please contact us to discuss!
0
Comments
-
RP .. Martin is fully aware of this .. as I have exchanged emails with him over the matter - well matters , as we have discussed
direct deals ( direct only lenders & dual pricing)
Fees for research on this
True independent work.. ie where all commisison is refunded
He does mention it in his article.. but it gets lost a bit amongst the stuff he feels is more important! Whilst over 90% of my cases in the last year have ended up with direct deals... yet a lot of consumers will follow the article and use a cashback website... that does not offer advice/ indemnity NOR direct deals!!!!
its an old thread but I raised this http://forums.moneysavingexpert.com/showthread.html?t=880695&highlight=direct
a number of brokers will even refund the upfront fee if it's decided a broker deal is better anyway , or if other commision earning products are taken.Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.0 -
rpmortgage wrote: »
I guess what i'm trying to say is that unless a mortgage advisor is charging an upfront advice fee how can they be Independent, how could an advisor that does not charge a fee recommend a product from a lender that only offers mortgages to clients that go direct, they would earn no income and go out of business.
/quote]
It's all down to how you want to market your business.
These days, I am often telling people to go direct to a lender or stay where they are. I don't get paid a penny for any of that.
But, I gain the 100% trust of those clients, know that although I can't help them this time, I might be able to help them next time, and if they decide to refer their friends and family to me, I might be able to help them instead.
Not only that, if I do end up telling them to go to the likes of HSBC for their mortgage, I know I can still arrange better and more competitively priced insurance products for them.
Not saying your way is wrong and mine is right, or vice versa, there are pros and cons to each.
Without bragging, I can usually tell within about five minutes whether a client is best to deal with me or go direct to the lender, so it is not as if I am wasting hours of my time.I am a Mortgage adviserYou should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Yeah, a lot of my " go direct" are done as either freebies for long standing clients / fee refunded on other businessAny posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.0
-
rpmortgage wrote: »I guess what i'm trying to say is that unless a mortgage advisor is charging an upfront advice fee how can they be Independent, how could an advisor that does not charge a fee recommend a product from a lender that only offers mortgages to clients that go direct, they would earn no income and go out of business.
Martin if your listening please contact us to discuss!
Martin cannot himself talk to everybody who wants to talk to him.
I thought your post was excellent and it avoided spam.
You make an almost unanswerable case for a fixed fee service.
However, sadly, a lot of people prefer to have a FREE service and risk missing out on a better deal.
Power to your elbow. :A :A :A :A :A...............................I have put my clock back....... Kcolc ym0 -
Robert_Sterling wrote: »Martin cannot himself talk to everybody who wants to talk to him.
I thought your post was excellent and it avoided spam.
You make an almost unanswerable case for a fixed fee service.
However, sadly, a lot of people prefer to have a FREE service and risk missing out on a better deal.
Power to your elbow. :A :A :A :A :A
It does not have to be one or the other...
You pay the fee and get told about "direct", "broker only " and "normal" deals ,with some brokers if you decide on a commission paying product you get the fee returned and the benefit of their processing... if you decide on a direct deal , then it would be money well spent if the deal saves you more than the fee ... WIN/WINAny posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.0 -
Does the client know what your fee would be and also what your commission will be at the time they make their choice or do they have to take a shot in the dark?...............................I have put my clock back....... Kcolc ym0
-
I agree but then I would do.
It can be a bit of a leap to go to fees but I dont think I have lost any business because of it and if I have then its business that I probably wouldnt have wanted any way. A lot of advisers are scared of fees but you will find firms/advisers that have moved to fees will tell you that its not that bad and if explained correctly, consumers soon realise how better off they will be.
Fee with commission offset will of course become a mandatory option for IFAs from 2012 (or conventional fee - pay by cheque). Commission wont be an option. Mortgage advisers will escape that but I think it misses an opportunity to make mortgage advice more professional.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
A lot of advisers are scared of fees but you will find firms/advisers that have moved to fees will tell you that its not that bad and if explained correctly, consumers soon realise how better off they will be.
If your clients are better off because you went for fees then why did you go for fees?...............................I have put my clock back....... Kcolc ym0 -
The main issue that we had with this change was that to be able to recommend a client go to say First Direct you have to be able to produce a KFi, we now have a system that will do this but the like of Trigold, Mortgage Brain, emoneyfacts do not do this.
I would be interested to see how you all are managing it compliently!0 -
Robert_Sterling wrote: »Does the client know what your fee would be and also what your commission will be at the time they make their choice or do they have to take a shot in the dark?
fees ( if thats the option taken- personally I offer 2 different routes , each varying depending on size/ complex of case and whether an existing relationship) fully disclosed upfront, and example commissions given ( exact if client wants to know for particular lender ) + I still offer " whole of market- without direct deals, if that makes sense " service for those who want to do own research/ not pay a fee ( albeit I recommend against it)Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.7K Banking & Borrowing
- 253.4K Reduce Debt & Boost Income
- 454K Spending & Discounts
- 244.7K Work, Benefits & Business
- 600.1K Mortgages, Homes & Bills
- 177.3K Life & Family
- 258.3K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards