Mortgage advice

MSE_Martin

Two things.

1. This thread will be split so the discussion can continue, but as its brokers amongst themselves i dont want it in the article linked from the site

To answer Payless's point, and i must apologise i've been filming all day and hadn't seen the article when it was up on the site. I wrote it, but didnt do the chart myself, my normal process is to review the onsite article, but i'm only just getting round to it now.

COMMENTS IN CAPS FOR EASE

1. Article States " If a broker isn’t whole of market, walk away. "
but then later in chart lists a brokers (MG)service level that is not whole of market ( see Key Facts IDD)

SLIGHTLY SPURIOUS AS MG IS LISTED AS IT IS MENTIONED IN THE ARTICLE. IT DOESN'T STATE IT IS WHOLE OF MARKET AND THE ARTICLE CONTEXT SAYS EXACTLY HOW IT SHOULD BE USED. IT IS NOT RECOMMENDED AS ADVISORY BUT IN ITS CASHBACK CONTEXT WILL SOURCE ANY AVAILABLE MORTGAGE. HOWEVER FOR CLARIFICATION THIS WILL BE NOTED IN THE TABLE THAT ITS EXECUTION-ONLY SERVICE ISN'T WOM (BUT NOR IS IT RECOMMENDED FOR SOURCING MORTGAGES)




2, States Charcol is Whole of market - which I belive is correct for face to face , although perhaps should make it clear that Charcolonline is a panel based ( and as they state in own IDD this is not whole of market) - in linked article "broker survey" their web/tel is again incorrectly referred to as whole of market ( or if that article is correct , their own IDD is incorrectly set up )

( all regulated brokers have the choice of offering different service levels/ fee structures to different clients / distribution channels, thats why its important to get a personalised "Key Facts IDD)

QUITE RIGHT. I NORMALLY STATE THIS ABOUT CHARCOL ONLINE IN THE PIECE, BUT ACTUALLY TOOK IT OUT OF THE TEXT THIS TIME BECAUSE I THOUGHT IT WAS CONFUSING ESPECIALLY AS I SLATE ITS £5 OFFERING, I HAVE ALREADY NOTED THAT SHOULD BE CHANGED IN THE TABLE (CHANGES BEING DONE MONDAY)

3.Why ‘independent’ is irrelevant box
Whilst this does raise a discussion point , not sure I would go along with this totally -
There is much more chance of an independent mortgage adviser ( if client selects a fee based service) will be willing to include non fee paying providers in their research ..IMHO not much chance of that from a commission only broker / no advice routes (whatever they say)

Bit of you get what you pay for? - that said my personal experince and believe industry norm is that whilst an independent usually offer clients a choice of commission( with or without a topup fee) or fee only ( rebates d commission totally ) most take commission option.

Implication in text that that average broker fee ( with commission rebated) was 1% - is that really true? ( see comment above) even in chart its down to 0.33%

Also does not cover the fact that independent advisers working on a fee basis then rebate all the commission ( this rebate might even be higher than the fee charged - )

INDEPENDENT IS TOTALLY IRRELEVANT BECAUSE THE DEFINITION IS STUPID. OF COURSE IF YOU DONT READ THE ARTICLE THEN ITS A GOOD THING, BUT FOR SOMEONE READING THE ARTICLE I THINK 'IGNORE IRRELEVANT' AND ASK THE RIGHT QUESTIONS AS DEFINED THERE IS MUCH BETTER AND THAT IS THE CONTEXT OF THE PIECE

4 Not sure about the morals / regulatory impact / client protection of suggesting someone takes advice from one route then transact via a non advice route for a rebate
( if money saving theme - perhaps IMHO would be better to say , "negoitate fees/ rebates with adviser who came up with best advice )

THIS HAS BEEN A CONSTANT METHOD OVER THE YEARS BROKERS ALWAYS ARGUE ABOUT THE MORALS, SO DO TRAVEL AGENTS. PROBABLY WORTH RE-READING THE MOTTO ON THE FRONT PAGE OF THE SITE!

I agree that for someone who either does own research or willing to accept limited panel with no advice , the MG route is very "money saving", well initially at least , ( and the site is very user friendly)

however under an advised route , you may find ongoing advice from an adviser more valuable than an initial cashback.

I AGREE, WHICH IS WHY THE ARTICLE SAYS THAT (RATHER CONFUSED AS TO THE POINT BEING MADE HERE?)

ps ...as previously requested privately , any chance of removing the bit about me , as this would be fairer to the other brokers who also now give their time on these boards

5.charcol link landing page not correct

THANKS WILL GET THAT CHANGED

dunstonh

After all if people will pay real money to estate agents, why not to guys like you?

Because they wont. There is a small movement towards fees but the average consumer prefers commission because it does not involve an up front payment.

If MSE isn't regulated by the FSA, and [independent] financial advice can therefore not be given on MSE, why do IFAs use MSE boards to slag out whatever they have to slag out?

Well, as I am the only IFA commenting on this thread, its clearly aimed at me. I post because I can and i feel I have something to offer. You may or may not find it of interest but others do. If you dont like what you read, go view another thread.

Well said innovate. This thread is in danger of looking like a load of disgruntled brokers complaining over consumers being offered a choice.

Choice that has always been there. However, instead of it being in two regimes, independent or tied, you now have it spread over 10 regimes. Many of which are at conflict with each other and misleading to the public. Every consumer group and independents were against these changes. It was only the banks and the big salesforces that stood to benefit from these changes. Perhaps you work for a bank?

AndrewSmith

On these forums IFA's and Mortgage Brokers (on the whole) give up their time for free to offer professional generic advice to members of the public who ask for it.

This advice is given without any kind of bias, sales spin or personal gain on the part of the IFA / Broker and is based, in most cases, on many years experience in their chosen field.

It is not the Brokers or IFA's that use this forum as a sounding board or to complain about the public having choice (which incidentally thay have always had) but it is increasingly being used as an arena for the unqualified financial enthusiast to try and discredit the advice given by truly qualified professionals.

Any qualified professional on this forum will have a warning on his/her signature stating that we are not giving specific advice, merely offering generic advice based on our experience.

Also remember this about most Brokers / IFAs:

When you call a plumber £150 before he even gets to your house.
When you employ a solicitor Upwards of £135 per hour, successful case or not.
Mechanic charges £30ish per hour just to tell you what is wrong with your car.

IFA's / Brokers even if they charge fees, (yes yes we all know about the tyoe of firm charging 3% of the mortgage etc but I am talking about the individual professional here) usually receive little or nothing unless the case / policy / mortgage is actually taken through to completion.

Unless you know exactly how IFA's / Brokers work then I feel it unfair to cast such judgements on our profession.

Andy

EdInvestor

AndrewSmith wrote:

It is not the Brokers or IFA's that use this forum as a sounding board or to complain about the public having choice (which incidentally thay have always had) but it is increasingly being used as an arena for the unqualified financial enthusiast to try and discredit the advice given by truly qualified professionals.

It's really quite unnecessary to make remarks like this.IFAs and brokers and other people selling products don't have a monopoly on financial knowledge and expertise.Savings and investing is not rocket science. "Unqualified financial enthusiast" includes people like Martin, I do believe.

Many people are interested in learning how to save and invest (and borrow)on a DIY basis, not only saving money on commissions and charges, but also hopefully avoiding being misled and missold.

The day that financial advisors establish a true independent presence and start working for, and being paid by,the client, rather than the providers of financial products, is the day they can start taking a high moral tone.

I am sure that most of them are well aware that this day is a long way off, and the FSA reorganisation is probably likely to stain the reputation of the genuine independent advisors even further, by creating total confusion in the marketplace so that all are eventually tarred with the same brush.

stanmoresaver

I think this post needs to get back "on track" It's about "sneekily getting mortgage advice for free" Therefore to me it is about that and will include the "morals" of consulting a professional and mis-leading him about your intentions

AndrewSmith wrote:

On these forums IFA's and Mortgage Brokers (on the whole) give up their time for free to offer professional generic advice to members of the public who ask for it.

This advice is given without any kind of bias, sales spin or personal gain on the part of the IFA / Broker and is based, in most cases, on many years experience in their chosen field.

It is not the Brokers or IFA's that use this forum as a sounding board or to complain about the public having choice (which incidentally thay have always had) but it is increasingly being used as an arena for the unqualified financial enthusiast to try and discredit the advice given by truly qualified professionals.

Any qualified professional on this forum will have a warning on his/her signature stating that we are not giving specific advice, merely offering generic advice based on our experience.

Also remember this about most Brokers / IFAs:

When you call a plumber £150 before he even gets to your house.
When you employ a solicitor Upwards of £135 per hour, successful case or not.
Mechanic charges £30ish per hour just to tell you what is wrong with your car.

IFA's / Brokers even if they charge fees, (yes yes we all know about the tyoe of firm charging 3% of the mortgage etc but I am talking about the individual professional here) usually receive little or nothing unless the case / policy / mortgage is actually taken through to completion.

Unless you know exactly how IFA's / Brokers work then I feel it unfair to cast such judgements on our profession.

Andy

Exactly! Most of the snipe on here relate to the unregulated salesforce days, Try catching up with the regulated world, Remember, you can sample this for free at your next remortgage!

But you are taking the "preverbial" if you want a cut of the fee paid by the provider

EdInvestor wrote:

The day that financial advisors establish a true independent presence and start working for, and being paid by,the client, rather than the providers of financial products, is the day they can start taking a high moral tone.

Hang on- Isn't this the matter- the thread is about getting advice for free- this just further concretes the fact that the average consumer will not pay for finacial advice.
Maybe the employer of an outgoing CEO, might pay for a few consultations for him, but that is not relevant to the majority of consumers.

Oh and talking of "high moral tone" just look at the title of the thread!

dunstonh

It's really quite unnecessary to make remarks like this.IFAs and brokers and other people selling products don't have a monopoly on financial knowledge and expertise.Savings and investing is not rocket science. "Unqualified financial enthusiast" includes people like Martin, I do believe.

Andrew didnt say everyone. There is a general trend of posting that is anti financial advice. The assumption being that all advice is wrong and shouldnt be paid for as the advisor only sees you as a cash cow. We all know that people like that exist in every profession. However, if you were to read the posts here on a regular basis the assumption is that all advisors are like that.

The day that financial advisors establish a true independent presence and start working for, and being paid by,the client, rather than the providers of financial products, is the day they can start taking a high moral tone.

When the consumer is willing to pay, perhaps we will move more that way. In the meantime, that same consumer shouldnt complain about it if they are not willing to pay those fees themselves.

the FSA reorganisation is probably likely to stain the reputation of the genuine independent advisors even further, by creating total confusion in the marketplace so that all are eventually tarred with the same brush.

Totally agree. However, the FSA is unlikely to change it. They rarely back down on something and the FSA is generally anti IFA and pro bank. Common sense should say that independent advice is best. Its cheaper, the product range is better and the qualifications, knowledge and experience of the advisor is likely to be higer (yes there are exceptions). Yet, surveys show that many will still not visit IFAs as they do not realise the difference and also that when they do see a tied/multi-tied agent, they actually believe that person is independent. We have seen that here too when people have posted saying "my ifa did this" when it turns out it wasnt an IFA.

EdInvestor

There is a general trend of posting that is anti financial advice. The assumption being that all advice is wrong and shouldnt be paid for as the advisor only sees you as a cash cow. We all know that people like that exist in every profession. However, if you were to read the posts here on a regular basis the assumption is that all advisors are like that.

I don't see it myself.Martin wouldn't bother going to the trouble of writing an article on how to get the best advice for free if he didn't think the advice was worth having, would he?

Equally I don't think you would have been thanked 505 times if people thought your comments were worthless.

The value in sites like these is that they can empower people to do some things themselves and also to understand enough about the system so that they can use advice properly , spotting the difference between good and bad recommendations and asking the right questions.

No good IFA has anything to fear from that - it's only the cowboys that should shake in their shoes.

I sympathise with the independent IFAs about the FSA, but it's easy to understand the regulator's view.Their brief is to step up investor protection and crack down on misselling and general cheating - and obviously if all the salesmen are concentrated within big banks, they're a lot easier to control than loads of tiny one-man businesses and freelance operations dotted about the landscape.

As I've said before the independents need to set up one single representarive professional body with ethical standards, exams and a disciplinary procedure.Oh and they should charge fees.It's pretty easy to show that investors will save money by paying fees, isn't it, after all?

payless

all interesting points

IMHO The bits about " fee paying and independent" is important ..... especially ( as far as I can see) most independents offer a choice or fees or commission.

As stated I feel the route implied in the article
*you could get advice elsewhere for free first, then process via MortgageGenie for the rebate"

does neither the industry and consumer protection any good.

Whilst it may be a small point in the article, the version in todays Guardian highlights it



---
Yes good advisers will likely not see any major fall out from the current clients that trust them , but they could waste a lot of time of those , that have no intention in taking up the offer.

I stress I see nothing wrong with no advice routes , rather the promotion of them to those that need ( and have sourced advice) ... to compare with the travel industry , I don't think its the same as shopping around, I think its the same as shopping around, but then buying without ATOL/ABTA protection.

Of course " non advice / rebate " firms need to be careful on how they set their business model , as they are not actually adding much value in the terms of the transaction ( although I do like MG website) it won't be long before someone esle will undercut them

dunstonh

I sympathise with the independent IFAs about the FSA, but it's easy to understand the regulator's view.Their brief is to step up investor protection and crack down on misselling and general cheating - and obviously if all the salesmen are concentrated within big banks, they're a lot easier to control than loads of tiny one-man businesses and freelance operations dotted about the landscape.

You have hit the nail on the head. Independents by their very nature have different advice processes, different paperwork, different systems etc. The salesforces (tied, multi or IFA) all use the same process. It makes it far easier to regulate. However, IFAs account for the majority of business placed but have the lowest number of complaints. Perhaps the focus should be on what is best, not what is most convenient.

I don't see it myself.Martin wouldn't bother going to the trouble of writing an article on how to get the best advice for free if he didn't think the advice was worth having, would he?

As I said, it isn't everyone.

It's pretty easy to show that investors will save money by paying fees, isn't it, after all?

It doesnt always work out cheaper. If you charged fees only, you elimanate a large proportion of the population from getting advice. How many would be prepared to pay £500 to get a life cover policy that costs £2pm less than commission option? or to pay £2500 for an investment porfolio when the commission (which would be rebated) was £1000.

The wealthier often pay fees because its cheaper for them. However, the average person would find it more expensive much of the time.

There is a mystery shopper article every week in a pink paper. The IFAs that only give out fee advice are criticised every time when they refuse to give out advice over the phone. We either want fee based advice or we do not. oh by the way, at least one of the four outlets mystery shopped is a bank and they nearly always come last. Usually because the telephone service is crud, they dont have a suitable product or they dont know what the mystery shopper is talking about. i.e. a few weeks back, a bank financial advisor had never heard of wraps or fund supermarkets and tried to make out they didnt exist.

AndrewSmith

I completely agree that it is far better for all concerned to offer advice on a fee charging, commission rebate basis, however as you have rightly said it's the public that must realise that you get nothing for free in this world.

In the financial services industry we seem to be able to do nothing right. If we charge a fee and refund the commission, the clients have the opinion that financial advice should be given free "like the banks do".
Then if we don't charge a fee we are accused of only going for the products that pay the most commission.

Damned if we do, damned if we don't.

With the FSA and the tightest regulatory framework that I have seen in the last 12 years there are systems in place which make it difficult to not recommend a product to the client that is the lowest price if it fulfills all their needs. If not recommending the lowest price fitting all the criteria then you have to satisfy your compliance department and unlimately the regulator that there is very good reason to do so.

When you look at the majority of leng-term industry experienced professionals, we have qualified to do this type of work over a number of years and are in some cases more qualified than your average accountant or even conveyancer. However we seem to be treated as though we are literally trying to "put one over" on everyone who walks into our offices.

I only wish that some of the critics would come and spend a week in the shoes of a busy IFA or Broker to see how much work, in both timescales and accountability there is in every case.

As for choice, clients always have the coice. Use a professional and have advice given which is heavily documented and against which the consumer has full protection via indemnities, or go it alone on a non advice basis and have little or no recourse if you are not happy with the result later on.

In support of the main original topic of this thread, Unlike most other professionals in the service or advisory industry, all the time we are not charging non-returnable fees for our work there will always be an argument for taking the advice of a qualified professional and then placing the business yourself elsewhere.

Having said that consider this point. If the IFA or Broker is used more and more in this way he is going to be more likely to try and get every penny from a case he possible can to cover the costs of those who go elsewhere. This scenario should it ever be allowed to get that far (god forbid) will only then fuel the fire for more acrimony and mud-slinging at the industry as a whole.

People accept the word of a Solicitor, Conveyancer, Accountant, Surveyor even a builder or a mechanic and are happy to pay for this without ever necessarily getting the result they want. However many people do not accept the word of their financial advisor even though in some cases it has cost them nothing to have a complete financial review.

It is a stange situation and one I do not have the answer to. It is a problem of public perception and understanding of what being a Qualifed Financial Services professional entails.

By the way, this is a cracking debate and thanks for all the different points of view. I love this forum and am not too proud to admit I learn from it constantly. It is good to have a place where frustration and point of view can be vented without prejudice.

THANK YOU MARTIN.