Broker fee free

smcqis

When a whole of the Market Broker is ‘fees free’ and say they claim their fees from the lender, is there anyway the lender could charge this back to me?

I assume as each mortgage is already set out with arrangement fees, valuation fees etc then they wont be able to

dunstonh

When a whole of the Market Broker is ‘fees free’ and say they claim their fees from the lender, is there anyway the lender could charge this back to me?

No.

I assume as each mortgage is already set out with arrangement fees, valuation fees etc then they wont be able to

You pay the fees you are told. You do not pay the commission to the broker. The lender pays that.

herbiesjp

Make sure you get the Initial Disclosure Document from the broker at the outset, stating how they charge fees, if any.

They should give it to you automatically though.

Windmill67

All brokers get what's called a "Procuration Fee" paid by the lender. It's basically commission and ususally worked out as a percentage of the overall advance. It's always noted in the mortgage offer (if it's a regulated mortgage anyway) so that you can see what the broker will be paid. As Herbie above has said, get the IDD and fee disclosure docs if your unclear. Also the KFI and Offer must show any direct fee paid to the broker. If they don't and the broker charges you it'd be fairly easy to get it back.

payless

Just remember no such thing as a free lunch :

Advice (on mortgage) needs to be paid for -

a. commisssion - often by reporting back about deals that only pay the broker ( so not really TRUE indepenedent / whole of market)

OR

b. A fee

OR

c. Cost of work offset by commissions from other products ( whether formally or informally)

OR

d. Combination of some of the above

VIGILANT22

Payless....I know some mortgage advisers are charging/giving advice on direct deals...Compliance?? , by all means make clients aware of what can be obtained direct. However, giving advice!!....
When your client goes direct to the lender, 9 times out of ten they won't speak to an adviser..so they will rcv a KFI & offer from the lender and it will be stated under Which service are we providing you with? We are not recommending a particular mortgage for you. ,,,However if they do see an adviser it would then say We recommend etc.......
So which KFI do you issue advise or non advice....How can you have on file 2 KFI's ...one advised & one non advised or both advised under different FSA No's???. Most importantly.. In the event of a complaint, where does this leave the client?

happybroker

VIGILANT22 wrote: »

Payless....I know some mortgage advisers are charging/giving advice on direct deals...Compliance?? , by all means make clients aware of what can be obtained direct. However, giving advice!!....
When your client goes direct to the lender, 9 times out of ten they won't speak to an adviser..so they will rcv a KFI & offer from the lender and it will be stated under Which service are we providing you with? We are not recommending a particular mortgage for you. ,,,However if they do see an adviser it would then say We recommend etc.......
So which KFI do you issue advise or non advice....How can you have on file 2 KFI's ...one advised & one non advised or both advised under different FSA No's???. Most importantly.. In the event of a complaint, where does this leave the client?

Mortgage sourcing systems can now produce kfi's for direct to lender deals that are recommended by the broker. The broker will need to ensure that his/ her PI cover is extended to encompass direct only deals and the complaint would be with the broker...."simples".

The lender won't be making a recommendation so they can quite happily produce a non advised kfi and CIDD. Brokers all over the place are forging relationships with branch mortgage advisers to provide clients with a fairer, more comprehensive service. The only issue in my mind is that the broker can't help as much with chasing things up and can often struggle to get information on lending criteria.

dunstonh

I know some mortgage advisers are charging/giving advice on direct deals...Compliance?? , by all means make clients aware of what can be obtained direct. However, giving advice!!....

Independent mortgage advisers are expected to consider direct deals, unlike whole of market.

The adviser is retailing advice. That is what you are buying. It doesnt matter if you submit the application yourself, get the client to submit it online or send them into a branch. The liability is on the advice given.

payless

I would be careful of making a direct product-specific recommendation - I generally like to split the research of deals from the advice of which type of mortgage ( if any) is most suitable. Its all about transperancy

As advisers we do need to ensure we abide by the rules , but remember the regulator uses a principle-based approach to regulation..... and they recognize that we are in a changing market - especially on this point . I don't think it would be fair to use regulation hurdles as a reason to disadvantage a client

VIGILANT22

dunstonh wrote: »

Independent mortgage advisers are expected to consider direct deals, unlike whole of market. QUOTE]

A mortgage adviser who offers a few option and is not necessarily whole of market but is representative of the market, can call themselves Independent Whole of Market.

A mortgage adviser who is whole of market but does not offer a fee option cannot call themselves Independent.

Independence
MCOB 4.3.7 R (1)(b) means that a firm wishing to hold itself out as independent will need to give a customer a purely fee-based option for paying its fees.

VIGILANT22

dunstonh wrote: »

Independent mortgage advisers are expected to consider direct deals, unlike whole of market.

The adviser is retailing advice. That is what you are buying. It doesnt matter if you submit the application yourself, get the client to submit it online or send them into a branch. The liability is on the advice given.

Yes but then the client receives the KFI & offer from the lender saying no advice given in arranging this product.

The "advice" given by the "independent mortgage adviser" has no offer based on the advise given.....this cannot be a compliant file