Independent Mortgage Advisors or Not??

payless

rp - are you using m2000 encore for kfi's , as they are closing next month.

dunstonh

If your clients are better off because you went for fees then why did you go for fees?

I'm not sure you meant what you typed as it reads why did you do whats best.

The problem is the consumer more than the adviser. They perceive advice as something they should get for free. The perceive the commission payment paid behind the scenes as free to them. Advisers perceive that consumers wont want to pay the fees.

If you get a consumer that can understand that by paying a fee, you will get lower charges, improved terms or even a rebate and you will be true whole of market then its easy. If you get a consumer that doesnt understand that then they are not likely to do business with you.

Banks often try to put consumers off IFAs by saying it you get to an IFA they will charge you. This is despite the banks being more expensive. Recently highlighted in the investments section by someone that went to Alliance & Leicester and said they got free advice rather than an IFA who would have charged him. The commission was £21,000. I pointed out to him that it would have been about £2000 with a fee based iFA and the £21,000 would have offset the £2k fee and given a £19,000 rebate.

Going to the bank was "free" and but in reality cost £21,000. Going to the IFA cost £2000 but made the person £19k better off if the same product had been used (which it wouldnt have been as there were better alternatives but thats another thread). He only realised it when it was pointed out like that. He though paying a fee would mean fee plus commission not instead of.

rpmortgage

payless wrote: »

rp - are you using m2000 encore for kfi's , as they are closing next month.

No we do not use that system, we have been working with a new company that get their info from Defaqto the same place as the Government.

payless

Of all the back end providers I see, they seem to be the slowest to update, my personal view is that on direct deals its a lenders responsbility to provide a KFI .. we can comapre their deals (using various research methods) to allow us to consider the deals, but if the lender is not prepared to provide a KFIs to independent adviser or on website for general use or even to the main systems then I think its potentially dangerous to rely on a third party systems ....
( Its rare I would use a mainstream sourcing sytem for KFI production on a mainstream provider, like alone a direct deal)

herbiesjp

Trigold will be doing this shortly though as well

jamtart6

Our mortgage advisor was worth his weight in gold, particularly as we were FTB's. I wish he had been our solicitor too!

I was suspicious of the whole fees-free thing, and have a friend who lives in Scotland who is a mortgage advisor and she checked to see if the rates he had given were the best deals based on our circumstances. She came back with the same ones he had given us, so we were then happy and felt like we could trust what he was saying.

For such a big thing as a mortgage, many people would not feel confident using the internet to find the best deal, I know I certainly wouldn't and I'm extremely good with technology, I just wouldn't want to mess something that big up, so I would always use a broker.

rpmortgage

payless wrote: »

Of all the back end providers I see, they seem to be the slowest to update, my personal view is that on direct deals its a lenders responsbility to provide a KFI .. we can comapre their deals (using various research methods) to allow us to consider the deals, but if the lender is not prepared to provide a KFIs to independent adviser or on website for general use or even to the main systems then I think its potentially dangerous to rely on a third party systems ....
( Its rare I would use a mainstream sourcing sytem for KFI production on a mainstream provider, like alone a direct deal)

The problem is that the FSA say if you are advising a client to go for a direct deal you have to produce a KFI for them, I know how you feel but I don't think it would be wise to cross the FSA!
You probably thinking that it's ok for them to let banks go bust but god forbid we do not produce a KFI!!

payless

extracts from the [strike]rules[/strike] clarification

if an adviser does not have full details of the product and how it will function, we would question how they can be satisfied it will be suitable for the customer.

Personally I think - having full details of a product for an adviser to compare, and having them in a compliant consumer KFI format are different things ... which would be my answer to that question.

In the cases where I can not obtain a direct deal KFI from lender or third party ( still not happy with 3rd party route- I've seen some nasty mistakes, particularly from corporate estate agent advisers who rely on these systems, but if avaiable I use it , if I must ) , then I am happy to suggest client considers this particular deal and once they have obtained a KFI I will review it and make it a recommendation

Gorgeous_George

Paying at the point of sale would stop people using multiple 'advisers' to get the 'best' deal. Hidden charges based on a percentage are no better than stealth taxes.

If I want an hour of your time, I'm happy to pay. I don't take my car to the garage and expect them to diagnose the fault free of charge so that I can get a less experienced mechanic to fix the problem. Equally, I don't expect to pay 10 x more to have a new car fixed than an older one. Why should a £200K mortgage earn the salesman more than a £50K mortgage? It's the same (or very similar) work.

GG

Robert_Sterling_3

dunstonh wrote: »

I'm not sure you meant what you typed as it reads why did you do whats best.
.

What I meant was this.

If you charged a fee you get X
If you get commission you get Y
If your customer pays you a fee X
And they are better off by doing so then X must be less than Y

So you get less from fees than from commission.