Martins View On Using Mortgage Brokers...

notiesmortgagegirl

Hi Lowis,

Martin sums it up in one really easy statement.

Here it is:

"The answer to hope for…

You want a fees-free, whole-of-market broker. This means it only earns commission, however as it’s whole-of-market, it must give you best advice anyway."

In other words the broker has access to lots of lenders products, but will not charge you a fee (no matter what), or even give you the option of paying a fee. He will work on the commission alone.

Before anyone says, "ah yes but independents give you the option of paying a fee or working on commission alone ....... your choice" all I would say is, read Martins statements above. It is really clear.

dunstonh

and i STILL don't understand this thread about what is and what isn't a fees free independent broker! i need to re-read it a few times :rotfl:

I wouldnt bother. It jumps around between classifications and minor issues which cloud the issues. It wouldnt be a bad idea if a mod deleted the bulk of this thread and we started over

what is and what isn't a fees free independent broker

I think i can narrow this down a bit more now.

To be independent, you have to offer the client the option to pay fees and have any commission rebated or to go on commission basis. ( fee option perhaps ideal for larger mortgages, poor quality lending or the cynical).

If you dont offer the fees option, then you can call yourself whole of market if you you offer whole of market but you cannot use the term independent.

Then you have multi-tied/panel or single tied which are always best avoided.

On top of those classifications, the advisor (of any category) can choose to add a fee for providing a service which goes directly to them. That is the bit that Martin suggests you avoid (if i read it correctly).

lowis

so would L&C be considered fees-free whole of market?

I am thinking of getting them to do a search for me and also a broker a friend has recommended (but they charge £195 if you get the mortgage, they are whole of market though).

Conrad

notiesmortgagegirl wrote:

Hi Lowis,

Martin sums it up in one really easy statement.

Here it is:

"The answer to hope for…

You want a fees-free, whole-of-market broker. This means it only earns commission, however as it’s whole-of-market, it must give you best advice anyway."

In other words the broker has access to lots of lenders products, but will not charge you a fee (no matter what), or even give you the option of paying a fee. He will work on the commission alone.

Before anyone says, "ah yes but independents give you the option of paying a fee or working on commission alone ....... your choice" all I would say is, read Martins statements above. It is really clear.

Martins take is too simplistic, with respect.

I own a mortgage brokerage and I charge fees. A freind ownes one and he is fees free, however his service is inferior to mine. He relies on a numbers game, whereas I can take my time over each case in the knowledge I make a decent profit for each case. He is always in a rush and makes the kind of mistakes I see on this forum regularly.

I also find you get a lot of time wasters and time vampires. Charging a fee up front soon rids me of most of these leaving me to spend quality time and energy on deserving cases.

Keep in mind some people fail to ever complete (due to unforseen divorce, job loss or change of heart etc) and this cost has to be factored into the business.

So called fee - free brokers can be very focused on selling you insurance, which we strictly do not do. We find our clients respond well to this - they detest having insurance rammed down thier necks, and I can tell you as someone who's been in this business a long time that such insurances very often do not pay out (freinds Husband got killed in road accident and Zurich life have now pointed out a deep hidden clause stating motorcycle road accidents are'nt covered, I could go on), or fail to meet the hyped sales patter when it comes to a claim.

You get what you pay for in this life. I shop in Waitrose which costs more than Tescos but I understand the benefits of so doing.

Having said all this, really straightforward cases do not require a broker.

payless

Glad I missed this thread whilst on hols ..... déjà vu or what !

helenecollins

hi Beena
I am an indepndent financial adviser and offer people the opporunity to pay by fees, commission or a mixture of both. Unfortunately I am not a charitable institution and I have overheads and bills to pay. What I cannot understand is why you are going to a broker if you are not prepared to take his advice as you are now asking other people to make recommendations for comparisons. If you use a professional you should expect to pay for the advice and take it.

If at point of receiving the advice you take it and apply to the recommended lender yourself, then you should still expect to pay for the advice you have received. If you choose not to take it, then again you should still expect to pay for the advice.

I can't say that I agree with Martin on his two questions and answers you should expect to receive. It's all about value for money and a good IFA should give you that value but you should expect to pay for it.

If your unlicensed mate tells you about what he thinks is a good mortgage deal and you take his advice, then you have no come back, but if you have taken the advice of an independent broker you do.

EdInvestor

The Observer has a go at this issue today and seems to suggest that "whole of market" can mean as few as 20 lenders.

Mandrill-buttocks

Like HelpWhereICan I am a mortgage adviser. Possibly unlike him I am also an Independent Financial Adviser and don't feel the need to poss red warnings everywhere because I am not giving any specific advice.:T

Whole of market is a fiction perpetrated by the FSA in the name of consumerism.

Things used to be simple - either you offered independent advice or you were 'tied' to a company. Now we have a free for all where nobody seems to know who does what. Eeven the FSA has admitted that it does not know the breakdown between whole of market and independents.

What a joke. This mob at Canary Wharf - unelected, unelectable, unaccountable, never wrong, overpaid, vengeful and downright nasty are playing with peoples lives and finances. Like Which, if it's in the name of consumerism it must be okay...RIGHT?:mad:

Carter74uk

I am in the process of using L&C to remortgage and have found them very good - efficient, concise, knowledgeable and thorough. I originally got their name from MSE and recommended them to my sister who also had a very positive experience.

People may be interested to know that London & Country have recently won Best Mortgage Broker of the Year beating the likes of Charcol, Savills etc. This was an award given at the annual Professional Pensions Awards which is a reputable industry organisation.

So now you know!

dunstonh

People may be interested to know that London & Country have recently won Best Mortgage Broker of the Year beating the likes of Charcol, Savills etc. This was an award given at the annual Professional Pensions Awards which is a reputable industry organisation.

I would put little weight in that award. The award floats between a limited number of high profile companies (like many of the "best" awards). The vast majority of financial services companies never get a look in. Its more of an award based on turnover of business than anything else. Hardly a good measure.