An Open Letter To Mortgage Brokers.

sims22

"I've just asked a solicitor for a guestimate of the cost of conveyancing only to be asked as question one what the value of my sale is; don't see how that effects the amount of work to be done."

The solicitors liability increases with the value of the property and so they charge a higher fee.

harryhound

But what proportion of his costs is professional indemnity insurance ?
I would like to think something like 0.5%:D

RufusA

Conrad wrote: »

Even now I hear of the salemen encouraging 2 year deals, merely so they get another sales opportunity regularly.

I wouldn't necessarily dismiss all "2 year deals" as bad advice.

For example if you believed that BoE would remain low over the medium term, then a short fixed mortgage with say the Woolwich could be a cheap way of buying in to < BoE + 2% tracker.

Rufus.

TonyMason

Of course Rufus you are right but Conrad obviously knows better.

I am pleased to report I have a 2nd interview for a sales and marketing job. It is using the skills I have built up over 20 years in face to face meetings to sell products and services of major companies. Nothing to do with mortgages !.

I have finally given up. The problem is the destruction of my industry has at the start seen the cowboys and people in for a quick buck leave but now very experience , very good and very honest mortgage brokers are leaving in droves.

If the mortgage market gets better these people, including me, may come back into the industry but I feel if they have a new career and are doing well which I am sure they will, they will not want to come back into an industry where they are valued as much as a bit of dirt on the underside of your shoe. The fsa, the lenders, journalists, hell even fellow brokers like Conrad regard us all as the Satan's Spawn so why work in that environment ?.

The mortgage broking industry's loss will be another industry's gain from my and many other good, skilled , decent brokers enforced change of career.

HelpWhereIcan

Conrad has his faults but I have come to see past his sometimes clumsy way of getting a point over and behind to the often valid point.

They have been too many brokers. Too many of them came off the street, took an "intensive" one week CeMap course and joined a sales organisation where volume was all that mattered.

Those brokers never learned the difference between sales and advice, very rarely took an interest in the wider economy and the implications for themselves let alone their clients (I remember one looking at me like I was a nutter when I talked about Basel I and II).

Working for some of the large salesforces they concentrated on 2 year deals, adding MPPI and a bit of level term. They did not have the training that taught them how to advise on protection properly etc etc. I really could go on.

A friend of mine sounded me out about joining him recruiting mortgage brokers and teaching them some of the skills that those of us who have been in the Financial Advice industry for a while consider as basics i.e proper factfinding, goal setting, solution design etc.

The idea being that the best of them (with further training and over time) could become IFAs with the rest remaining as mortgage specialists. Listening to some of the horror stories he has told me about how basic some of these peoples' skills and knowledge is, I find myself agreeing more and more with Conrad (God forgive me).

The shiny suited salesman is still there (it is not always the most honest that has the deepest pockets) and the honest adviser is under immense pressure and everyday faces giving advice that will earn them nothing... because it's best for the client.

Those of us who can apply a wider knowledge and skillset can try and get through without resorting to referrals to debt management or claims companies. However the fact is we have to change the way we work and look to the future of fees only based advice.

The RDR is aimed at everyone (not just the IFAs amongst us) - commission will be dead before long and the consumer will lose out in the mortgage market because of it.

It means that many people (who are not willing to pay a fee for advice) will not receive independent advice on a range of subjects from mortgages to pensions and investments.

Those people will be left to the mercy of the sales forces within the banks, internet brokers/comparison sites and the major insurers who will offer a 'free' service but not one that is independent. Ask any IFA about the steps Norwich Union/aviva is taking to lay the groundwork for direct sales to consumers.

IFAs will be charging fees because the RDR says so. Mortgage brokers will charge a fee because the RDR will cross over and that is the fairest way to do it. However, that means that most people with a simple need will not need/want to use a broker. They will need to DIY and be aware of the pitfalls of the sales and marketing practices within the banks and comparison sites.

The mortgage broker must therefore become a specialist again. More than likely a specialist within a fee charging IFA practice charging a fee to more complex clients.

So I agree with Conrad's opinion of some within our industry, I agree that many don't have the skills needed to advise on protection properly.

However, I also agree that the currrent climate has seen the end of some good people and more good people are going to go. This has done nothing but push them towards the banks etc where people have never had the best service, advice or fairest treatment.

payless

Good post

only thing I would add is that there is a big difference between the fees that a ( lets say fair) broker will charge, and the rip off merchants...

even Martin's articles don't throw good light on " fair" fee chargers - ie the ones who might charge just a small amount on top of commission , or those that charge a (fair) fee but then rebate commission.

We need to offer aprofessional service at a fair price- but on a basis that means we can stay in business

For example - a menu based fee that if results in a commission product being completed works may work less than the commission rebated , whilst still giving consumers research on direct deals ( but as not processing required a smaller fee levied in those cases- again offset by any insurance commission)