Mortgage advice

EdInvestor

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.

The aformentioned professionals are providing a service.They are not selling a product.As long as the job has a sales aspect, the mistrust problem will persist.

The true adviser should be analysing the client's financial position, explaining it to the client ( a teaching role in a way), suggesting improvements (possibly including specific products), and then recommending unconnected discount brokers/IFAs through whom to purchase the products if desired, so the client saves money.

I don't see why people wouldn't pay a reasonable fee for that. Mind you, IFAs' salaries are pretty high - about 50k pa I believe? Not sure people would feel they should pay that much!

dunstonh

The aformentioned professionals are providing a service.They are not selling a product.As long as the job has a sales aspect, the mistrust problem will persist.

Interesting point but I would say that IFAs are providing a service, although that would depend on the presentation and the type of advisor. I see what I provide as advice, report and then facilitate the purchase of a product.

The true adviser should be analysing the client's financial position, explaining it to the client ( a teaching role in a way), suggesting improvements (possibly including specific products), and then recommending unconnected discount brokers/IFAs through whom to purchase the products if desired, so the client saves money.

Why pass it to a third party who will put their charges into it?

I don't see why people wouldn't pay a reasonable fee for that. Mind you, IFAs' salaries are pretty high - about 50k pa I believe? Not sure people would feel they should pay that much!

I wouldnt be interested in employing any IFA that was earning just 50k a year. That is generally considered the lower end of the scale. 50k is closer to the running costs, not the income. Saying that, salesforce advisors would pretty much be around the 30-50k mark much of the time. Although I dont rate them very highly (in general as there are always exceptions)

Former_MSE_Dan

This discussion has been split from the Official MSE article discussion thread.

payless

shame , as I think most of the comments posted are very revevant to the actual article

silvercar

Years ago people always said that you should be a dentist; no-one ever knew of a poor dentist. Not many people followed this advice, who wants to spend their lives sticking their hands in people's mouths?

I think its time I advised my children to become IFA's, anyone even heard of a poor IFA?

payless

vast numbers of "mortgage advisers " aren't IFAs

and a large number of IFAs don't do mortgages

Mortgage Advisers usually earn less than IFAs , some swap to IFAs later, some happy to stay ( or change from IFA to mortgage broker), really depends on where there skills lie, and how they attract their clients .

stanmoresaver

Can I, for one, thank Martin for the modifications made to the article which, IMHO, now has more respect to the right of a Mortgage Broker to make a living if he does a professional job.

thanks

SS

Original thread linked for reference-

http://forums.moneysavingexpert.com/showthread.html?t=137181&page=1&pp=10

AndrewSmith

I am tired of all the Anti-Broker spin on this site. The site would have you believe that 'whole of market' = every lender, which it does not. It would also have you believe that brokers will try to "flog you uncompetitive insurance and ancillary products". Again not true. What basis is this statement made upon?

This is where I, as a professional, become very annoyed. We have a duty of care to our clients to give full and rounded advice regarding their situation. Even limited to mortgage advice we have an obligation to highlight any protection shortfalls or discuss anything else with the client that could potentially leave that client exposed to financial loss in the future. This is called "DOING OUR JOB PROPERLY" not trying to flog uncompetitive ancillary products.

If when arranging a mortgage for a client it was established that there was, for example, a deficit of life cover or income replacement cover in relation to the new mortgage, we as advisors have an obligation to make the client aware that there is not sufficient life cover or anything else for that matter. If we ignored this and said nothing about it, the client subsequently gets made redundant for example and has insufficient monthly income to pay his mortgage. If the client file does not show that a recommendation to protect the clients income against such an event was made, the client has every right to submit a claim for damages against the advisor and/or his firm.

Also the FSA and the advisor's compliance department would be all over him like a rash.

So you see we are NOT trying to flog uncompetitive ancillary products we are giving what is known as 'good service'.

If you take a car in to be serviced and the garage discovers that your brake pipes are about to fail, but does not tell you. You drive the car home and 2 days later the brakes fail and you crash the car.

What do you do? You certainly wouldnt say "It's ok, the garage was trying to flog us uncometitive ancillary products". You would sue that garage and take them to the cleaners.

It's about time that people in general accept that true financial professionals have studied and qualified to do this job.

If you want advice on Plumbing, ask a plumber. On building ask a builder. On financial advice people seem to accept advice from everyone and everywhere except those true qualified professionals, the majority of whom have traceable compliance and satisfaction records which are excellent.

The consequesnses these days for improper advice given to a client (as long as the client carrys the business out through the advisor) are so severe that it is never in the interests of the professional advisor to try to do anything else but give excellent quality advice that is suitable for that client. The client is fully insured and indemnified against advice given by an advisor.

If the client however takes it upon themselves to arrange their own financial matters then they have absolutely no comeback at all.

I have decided that I will no longer be giving my time for free on this site. I have been giving good honest help to questions raised by posters for no personal gain to me. It is sad that, even though there are brokers and advisors on this site doing the same, we are still seen as untrustworthy and constantly questioned regarding the accuracy of our comments.

This will be my last post on this site.

payless

Andrew and Stan, I was not going to post on this subject again, but as you have brought it up ....

Guess this will end up being added to the other (separated thread)

Stan , yes a few changes , but I don't think my the main issue ( as detailed on original discuSsion thread) was addressed

Andrew, Whilst I think your comments have been posted whilst you are a little angry- hope you change your mind- I do support much of what you say

Not saying I won't be around at all, ( parts of the site are useful) and I do actually get something out of helping others - but even in recent months I have done what I can to lower my exposure
- partly because of a lot of questions for self-certs
- partly as I know some people have rec'd cold PM from other brokers
- partly as I think taking part in an advice forum does not fit in well with the site's general recommendation of "execution only providers" ( in insurance as well as mortgage board)- both in terms of consumer & industry protection.
- partly my view on what the larger brokers are implying when using the "whole of market " term ( thats an FSA issue rather than this site, but its the spin they use)

( as well as other reasons)

I have now changed my signature

That said , its Martin's site , and the direction is up to him

I never came on here to attract new business, as I don't need to,( but have had pleasure dealing with some MSErs that were great, and hope they also thought that they got a service at a fair price - as yes commission is a price!) but commercially , as brokers I suppose as we do get enquiries from this site , we would need to be careful that we are not spending time on people that like our advice, but really want to go via a cheaper ( non advised) route, as this will affect the service we could offer to other clients ( including MSE users, who approach for a full service, or just a reply on these boards )

stanmoresaver

AndrewSmith wrote:

This will be my last post on this site.

I too find this a great shame!

For the record, this guy not only freely helped people with answers to their mortgage questions but was also free with his business advice to me!
Again with no self interest or gain!!

I echo Payless's sentiments!

:-(