An Open Letter To Mortgage Brokers.

JustJewels

J-Boble wrote: »

condoming....I meant condoning. :0) Freudian slip!

J-Boble: when I read your post I was drinking tea, and unfortunately snorted tea out of my nose whilst trying to drink and laugh at the same time!

Thanks for the chuckle!

JJ

inca_2

Should I feel the need for financial advice; I definitely would NOT seek it from a muppet tied advisor in a bank

What a rude and presumptious idiot you have shown yourself to be with this post. I am a tied advisor (and also a branch manager) and am no muppet. I have the same CeMap qualifications as a broker does, am intelligent and dilligent also. Yes I agree that you can get a much wider advice level from a broker who can select products from a much wider market and have a great deal of respect for mortgage brokers. I'd love to hear your reasoning for why my only being able to only give advice on the products that the company I work for offers makes me a muppet? If you're going to make a sweeping statement like that at least display an iota of intelligence by backing it up with a decent justification? Following your reasoning that makes anybody who can only sell their own company's products a 'muppet'.

harryhound

OK I accept the challenge:

I won't try to score cheap points, by asking you to give retrospective advice; however we need to set the scene.

Early "retired" bloke aged 60 - 65 is in his bank, yes its Mr Hound paying in a modest cheque..

TELLER (looks at his joint account records: 2K in current account. 175K in the linked internet account. Cash ISA in name of Mrs Hound (presumably teller can see this?) 75K has recently migrated away by cheque. "Have you thought about getting advice from one of our advisers?"

HOUND (the answer was not yes but let's us pretend you were given my email address:).

T.B. ........................................."over to you"

inca_2

OK I accept the challenge:

I won't try to score cheap points, by asking you to give retrospective advice; however we need to set the scene.

Early "retired" bloke aged 60 - 65 is in his bank, yes its Mr Hound paying in a modest cheque..

TELLER (looks at his joint account records: 2K in current account. 175K in the linked internet account. Cash ISA in name of Mrs Hound (presumably teller can see this?) 75K has recently migrated away by cheque. "Have you thought about getting advice from one of our advisers?"

HOUND (the answer was not yes but let's us pretend you were given my email address:).

T.B. ........................................."over to you"

1) My CSAs would not be able to see that there is an ISA for Mrs

2) If I ever heard my CSAs simply asking 'have you thought about getting some advice from one of our advisors' I wouldn't be happy. This question would not be asked by my CSAs ( I observe them daily) as the only advisors we have in branch are mortgage advisors so answering yes to this would not mean they want mortgage advice (which I am assuming you must be referring to as you are calling tied mortgage advisors muppets?) For them to refer a customer to myself or one of the other mortgage advisors they have to have sat down with the customer and completed some sort of fact find which would indicate that the customer was looking to re-mortgage or borrow money against their property.

3) If a customer did not say yes then they would not be getting any advice from anyone, we don't use e-mail so nothing would come of having their e-mail address (if the bank had it the CSA would not know anyway) but if you would like to relate this to their address maybe then a CSA would not write out to the customer without an agreement for this to happen, and with a purpose (eg, the customer asked for information on the next fixed rate bond we offered). I cannot speak for the bank as an organisation about whether they would write to the customer if they had indicated that they would like to be written to by ourselves, only for the people in my branch. This is also true of some larger broker firms, a broker might not directly contact you without prior agreemement but the company itself might.

4) If you're looking to see what kind of advice I would give following this then that is ridiculous, we do believe it or not ask the odd question or two to find out what the customer is looking for, whether the borrowing is something we are comfortable with looking at (especially in retirement) etc etc etc.

Back to you......maybe with a more sensible or realistic scenario, if you want to argue that a tied advisor's advice makes them a muppet then maybe give a relevant situation (ie, being in a mortgage interview) and ask what advice I would give as a tied advisor and I will answer as honestly as I have to this question. The scenario you gave had no relevance to the quality of mortgage advice.

HelpWhereIcan

erm, hate to fan the flames, but It appears to me that harry was challenging you to give the reason(s) why he should see a tied adviser in a branch rather than seek advice from an IFA.

He says no to the CSA telling them he would rather get independant advice, as the manager this is fed back to you and you take the opportunity to drop him an email explaining why he would be no worse off Assuming, of course you have his email address and he has consented to contact this way, company policy allows it etc etc


I have been in the exact scenario Harry describes only last week. Paying in a largish cheque I was immediately asked if I had time to speak to someone about the best place to put it. I would have thought there was something wrong with the management at that branch (and a bit insulted ) had I not been asked.

Part of the problem is that his post was investment/savings related and your reply is very much mortgage based so, from the start, you are coming from different angles. However, the pro argument should be about the same so it is not constructive for anyone to argue the semantics.

For what it's worth, I do not think that it is automatic that the advice given or the quality of adviser within a bank branch is automatically bad/worse.

However (putting aside the obvious limitations of tied advice/sales) my experience of the industry is that bank based mortgage advisers tend to be younger and less experienced than most Mortgage Brokers (often a first step for a CSA looking to get into advice). I base this on having employed, managed and known people who have worked for banks both before and after I first met them in a professional capacity.

Putting aside the fact that most will have no more than Cemap (I have FPC, MAQ and am looking forward to advanced/diploma studies and exams over the next 3 years to stay as I am let alone become Chartered), most bank advisers have a formulaic approach to their advice. eg Offer a fixed deal, offer a tracker deal (let the customer choose), price up all the insurances, present and ski downhill if there are any objections.

I would argue that this does not demonstrate the skills that an experienced (not £3000 Cemap course with placement) Broker/IFA will have. I would be the first to accept that there have been some poorly qualified and inexperienced people attracted into mortgage broking over the last 2-3 years but they are generally on their way out and I have always thought that someone should ask anyone offering advice about their experience and qualifications.

The banks are the training grounds for most advisers are produce some very good people with very good skills (eventually), but those skills are honed and developed when they get into the IFA market. I think the gap is even bigger on the Investment side but that is possibly another thread.

To deny this is as daft as assuming that all branch based staff are muppets.

Unfortunately I will never be persuaded that tied advice from anywhere will be as good because being unable to access the best products can cost a customer £000s.

No matter how well the solution meets the needs/objectives, the customer is not best served if they could have achieved the same ends at a lower cost.

Accepting that no one company is the best in all situations also dictates that Independant advice and research is worth its weight in gold (let alone the additional experience that IFAs often have), but there are many good bank based staff and a number of very poor IFAs/Mortagage Brokers.

feisty1

HWIC I am also FPC/MAQ qualified and support all you say.

I do not agree with the way banks operate this service "We are not recommending a particular mortgage for you. However, based on your answers to some questions, we are giving you information about this mortgage so that you can make your own choice". How many times have you met a client who has been to a bank to enquire about a mortgage and thought/presumed they had seen an adviser...........and when you ask the client to see the KFI section 2 is ticked as above in bold. In my experience, clients are not made fully aware of what this means. Other banks have employees wearing "Customer Services Advisors", in my opinion this is misleading and as far as I am concerned this title has been adopted to dupe clients into believing they are seeing "the real thing".
I recently had a para-planner who had been a manager (a large branch) with the Abbey (26yrs old), the knowledge or rather lack of knowledge was frightening to say the least. This person was a graduate, so at the age of 26 you can work out how much industry experience this person had.
Inca is an example of limited relevant experience, branch manager but only qualified in mortgages! how can clients feel confident in this knowledge? On a simple level it is comparative to going to a reputable hair salon and finding the manager is only qualified in cutting and has no knowledge of any other procedures which happen in the operation ie tinting, perming etc. How can you manage a Bank without having the full knowledge of your operation?
I personally do not agree with the CeMap only qualification for Mortgage Advisers. I believe they should be FPC qualified (or the equivalent CF's) , then do the add on as MAQ was for mortgage advice. For the majority of clients this will be the biggest financial commitment they ever make, but someone coming from a saturated sales (kitchen/windows) background can gain CeMap relatively quickly and go out "advising"...when maybe a product with much less risk involving a contribution of say £50.00pm can only be conducted by a Financial Adviser.
You cannot compare tied to independent, as it is no denying that tied is biased, simply due to the limitation of products as that is all they have to offer. So on what is best product wise for clients, independent wins.............. on "muppets" they are everywhere, independent & tied.

Joe_Bloggs

I congratulate feisty1 for a coherent contribution.
J_B.
We need an 'acronym breaker' feature for this site.

inca_2

I am not disputing whether it is best for people to see a bank based advisor or a mortgage broker. In all honesty I think most customers would benefit more from dealing with a broker. The point I was making from the very outset is that I found the comment that tied advisors are 'muppets' to be pretty rude and unfair.

inca_2

Feisty I appreciate your post, I also understand that there are bank 'advisers' who don't actually give advice. My guys do give advice, their competency indicators require them to be dealing mostly on an advised basis. Yes my experience is limited more to a building society related basis, I have worked in a few areas of financial services but mostly in bank/building society roles. However, as I have previously stated, my issue is with being called a 'muppet' simply because I am a tied advisor. Mortgage advice is not my sole role but it is a regular part of it. As I have also said, not only on this thread but in past threads, I hold brokers in very high regard and feel that most people will benefit from their advice, I have worked closely with various different brokers and believe that they can often be worth their weight in gold. I have also passed on details of brokers I trust to customers who I could not help or did not have a suitable product for etc I am not doing the whole 'banks are better thing'. I am however defending myself againt being generalised by another poster as being a 'muppet'.

feisty1

quote: I am however defending myself against being generalised by another poster as being a 'muppet'.

inca: and i support you in this, in my opinion the one who posted such a reference is "the muppet"........I have no problem with genuine advisers in a bank, what i do have issue with are these companies who label their staff "customer services advisers" who meet a client, gather advice and then transact on an information only basis and the client doesn't clearly understand what that is.

I myself started out as information only whilst doing my financial planning exams for Prudential and was telephone based. We couldn't have been more supervised, as we had live monitoring, plus compliance recording all calls and dipping in and out of live calls. All clients had to be made aware at beginning of call, this was information only and not advice. However, if they required advice we could pass them to an adviser. I believe my training was second to none, I came out into the Independent Market pre M day and I was shocked to find the level of service & advice that was offered then. I truly believe my background & training has allowed me to "stand out from the rest"! and I don't believe I am an isolated case as I am not unique!..........happy christmas