FSA - the Blame Game - What if they remove commission payments for mortgage advice?

koexelek

Dan_1976 wrote: »

I do not see a future for fee free, or at least with the amount of fee free brokers out there.

I don't either. I have always been fee free up to now, but looking ahead it does not appear that the model is sustainable

I think the lenders feel they do not need intermediaries and brokers these days.
They can use the internet now to promote their products direct to the public, where as in the old days, they needed the likes of ourselves to promote them.
The commission they pay us in miniscule in the overall scheme of things, so that is not really the issue.
The issue is that they want the customer lock, stock and barrell, not just as a mortgage borrower.

I think a lot of us brokers will have to take the attitude, if you can't beat them, join them.... and will end up having to work directly for lenders again.
It will be a sad day for me if that ever happens, but that is what the FSA want.

dunstonh

I think the lenders feel they do not need intermediaries and brokers these days.

Not on current levels of business. However, once lending increases, they will need the capacity and if regulation increases, it will remain cheaper for them to use brokers than in house.

There are far too many brokers so a Darwin event like this will take care of numbers. However, its not always the bad ones that get pushed out.

koexelek

dunstonh wrote: »

There are far too many brokers so a Darwin event like this will take care of numbers. However, its not always the bad ones that get pushed out.

True.
A lot of the good guys have fallen already.

I survive by keeping things low key and due to the fact that I put money aside when times were good

TEDDYRUKSPIN

There will always be a need for financial advisors and specifically independent financial advisors.

I have yet to talk to any advisor in the last 2 years who have made a decent living compared to 2000-2006 levels.

I just cannot see any independent financial advisor live on the poor commission levels that are provided for fee free basis. All of you would have noticed how much it has been cut.

Another major fact is that customers are now expecting everything to be free. Hilarious it may sound but customers do not understand the amount of work that gets put through just for a mortgage, investment or even insurance. The administration and worse still the compliance part of things are so strict compared to 2002-2004 times.

The days are fee free are up. No one can survive with this.

I guarantee that the FSA are no longer happy with any FSA product provided on a non-advised basis. They are'nt too bothered about general insurance (i.e. home insurance, car insurance) but the rest is way to difficult for the normal customer to understand. The reason I know this is that the FSA have been conducting major interviews with the big banks such as HSBC, RBS, Abbey, Lloyds etc and are extremely unhappy about the paper work they are finding. At the current moment, HSBC are the worse culprits with extremely high levels of non-advised sales which were previously at 60% level per advisor. This has not dropped to 20% levels but the FSA are demanding this reach lower than 10%. Halifax are the next culprits but I believe this is due to alot of their sales being carried out over the phone and so on.

The FSA are targetting less than 10% non-advised per institution. It rather makes sense. Think about it. On a non-advised sales process the documentation can be less than a page in some places to 4 pages maximum. Even then it is computer generated by ticks etc. A non-advised process is way longer and definitely towards the customer.

The advised basis will always save both the advisor and the customer. None of them excuse of mis-selling will be reduced as the majority of good information will be stored on the suitability letter and ready for compliance checks.

The ever changing market is too fast for any customer to chase and therefore, all financial advisors will be for the better.

Take it on the chin.

Unfortunately, as many people have said, too many cowboys and indians have hit the market. Every ten years or so, these cowboys are exposed and this recession will be show. As long as these cowboys are out, the professionalism of many will remain.

I do not want to be associated as the next cowboy car sales man, who has ruined the financial industry and therefore, do not want to be called a cowboy. The FSA will sort this mess out but they are not god of all saviours.

nw_man

The FSA, asleep on the job as usual, are still going after the soft targets, i.e brokers and IFA's and leaving the real culprits, the banks, to carry on as per usual.

Lenders are going to love it if they dont have to pay proc fees anymore and clients arent willing to pay on the whole = no brokers and more business to the banks.

Sad but I see it coming.

koexelek

nw_man wrote: »

The FSA, asleep on the job as usual, are still going after the soft targets, i.e brokers and IFA's and leaving the real culprits, the banks, to carry on as per usual.

Lenders are going to love it if they dont have to pay proc fees anymore and clients arent willing to pay on the whole = no brokers and more business to the banks.

Sad but I see it coming.

I reckon the FSA and the Banks are in league together at the moment to see off the small brokers once and for all.
We are too honest with our clients for their liking

Dan_1976

I think the FSA have got bogged down with the idea that only brokers and IFA break rules. Somebody high up came up with TCF, all the middle management and other managers did not have the balls to say, sorry boss thats kak!

They took the eye off the ball and now look. Although, I think a lot of this happened pre reg and was well hidden.

To be fair to the FSA, they have a job to do and I dont think they in league with the banks, they are not given the support to be able to go after them now, Something that I am sure thePM regrets.

Lenders should be scared of the FSA not running rings around them. This will and I think is changing.

I feel for you brokers, I could not keep going. BEing a good broker done me in, to many people on 5 year fixes to the Nationwide and not enough 2 year fixes to the shabbey!

I just hope its the good ones that hang around!