Is this normal for brokers?

ashleyk

A couple weeks back I received an offer for the renewal of our mortgage deal from the Halifax but I was curious about something, so I rang the offices of a financial advisor I know to ask his opinion. In the past he had organised our life insurance for us, so I thought he would be helpful.

When I called he wasn't there, so I talked briefly with a colleague of his who understood we had a deal arranged but said he would keep an eye out for any better deals and let me know if he found anything. I said I was watching the site every day but he was welcome to call me if he could get any special deals. To avoid any complications though I specifically asked him not to call the Halifax because my deal was already taken care of.

Two days ago I discovered that he had called the Halifax and cancelled my deal to get it transferred through his company which would result in him picking up close to £500 in commission just for making a phone call... Frankly I was appalled at this behaviour and thought it remarkably out of order not least because I simply don't want someone taking over my arrangements like that without my consent, especially when the mortgage situation is so volatile at the moment.

I called the Halifax and explained the situation, so they have now cancelled his transfer and say they will revert to my prior agreement which they were happy to do because they will then save on the broker's commission charges. Am I wrong to feel that this broker was out of order? He certainly hadn't secured me any better rate than I already had and was merely stepping in so he could grab a commission knowing that all the work was already done.

koexelek

You won't save any commission, because you get the same deal direct with Halifax as via the broker. Instead of paying the commission to the broker, they keep it themselves.

However, I think you did the right thing. The broker was very out of order to do that without your permission. They should have been honest, saying you would get the same deal, but it would help them if they did it.
Most clients would not have an issue with that, but to do it without asking is well out of order.

ashleyk

I know I wasn't saving or losing any money like this. I just didn't like the idea of this guy calling up and inserting himself in the middle to make an easy few hundred pounds and trying to act like a hero. I viewed this as an unwanted intrusion and a step backwards because I was losing my direct contact with the Halifax.

koexelek

I know how hard it is for all brokers at the moment, but in my opinion it is not worth making a quick buck out of a customer by doing something you probably shouldn't....the ending up losing the customer long term when they relise what you have done.

Ian_Griffiths_Halifax

You did the right thing and I would ask the broker why he did it and where is his Initial Disclosure Document and the Key Facts Illustration for the Mortgage?

You had that deal sorted and could possibly even have lost it if he had cancelled that deal, then tried to do the product transfer again, but the deal may have been withdrawn and replaced at a higher rate.

I've done this before for clients in their full understanding that it was something they could have done, but we spent a lot of time in checking that it definitly was the right thing to do. They appreciated the time spent in checking and as it wasn't costing them any more or less to do the deal with me, they went ahead.

Do it right and everybody wins. Do it wrong and somebody always get p!$$ed off.

koexelek

Ian_Griffiths_Halifax wrote: »

I've done this before for clients in their full understanding that it was something they could have done, but we spent a lot of time in checking that it definitly was the right thing to do. They appreciated the time spent in checking and as it wasn't costing them any more or less to do the deal with me, they went ahead.

Do it right and everybody wins. Do it wrong and somebody always get p!$$ed off.

Spot on. If you are doing the job right, your client will WANT you to earn money out of it, as long as it isn't costing them any extra.

ashleyk

Ian_Griffiths_Halifax wrote: »

You did the right thing and I would ask the broker why he did it and where is his Initial Disclosure Document and the Key Facts Illustration for the Mortgage?

You had that deal sorted and could possibly even have lost it if he had cancelled that deal, then tried to do the product transfer again, but the deal may have been withdrawn and replaced at a higher rate.

The thought that I could have possibly lost the deal and ended up with a higher rate sends a shiver down my spine.

feisty1

ashleyk wrote: »

A couple weeks back I received an offer for the renewal of our mortgage deal from the Halifax but I was curious about something, so I rang the offices of a financial advisor I know to ask his opinion. In the past he had organised our life insurance for us, so I thought he would be helpful.

If he had been there and spoken to you, would you have allowed him to apply on yr behalf or would you have just carried on and done it yrself?

ashleyk

The point is that I already had a deal in place, so I would have stopped him. That's why I asked him not to call them. With everything having been so insecure with the banks of late I preferred to speak with them myself and establish some personal contact, especially since we bought our house in 2007 and don't have much equity due to falling prices. I really just wanted some technical information and since I had organised a few insurance products through this company I thought they could simply tell me as a courtesy.

feisty1

But you still sought his free "opinion"/advice

beecher

That's completely out of order, and daft too as you'll obviously now not recommend him to anyone you know. He must be desperate to do that for £500 - times must be hard! Is there someone you can complain to?