IFA's and HSBC Mortgages

Joey_3

I nipped into HSBC this morning to book a preliminary appointment to find out whether or not we could get a mortgage with them and what they could offer us (we currently bank with them).

I was informed that HSBC do not offer commission to IFA's, so they have no incentive to send people to HSBC, hence HSBC mortgages often not being considered, even by whole of market advisors. This seems very strange to me, does anyone know if it is true?

Imelda

Hi Joey,

This certainly appeared to be the case when I was looking for my mortgage, it seems only the fee charging IFA's included them. I only found out about their mortgages because I bank with them, friends recommended them too. I have no idea what other banks are left out.

Joey_3

Thanks very much, I wonder why HSBC don't pay commission.

I'll bear this in mind anyway when we go to an IFA, we'll have to see what HSBC say when we finally manage to book an appointment.

HelpWhereIcan

Joey wrote:

Thanks very much, I wonder why HSBC don't pay commission.

I'll bear this in mind anyway when we go to an IFA, we'll have to see what HSBC say when we finally manage to book an appointment.

They do not pay commission to brokers and therefore most brokers do not incude them in their searches, same with Britannia, Yorkshire Building Society, Direct Line, Cahoot, Egg. They have been rumours that they will start to pay commission to brokers (to get market share) but until then it is likely that only a fee charging broker would reccomend one of their deals to you.

There is an argument that, in most cases, a broker could get a better deal anyway. This hinges partly on the fact that HSBC's deals are mainly priced for the long term so do not look overly attractive as a short term deal, but this is a 'for' argument when someone is looking for long term value.

Personally, I have normally found that I am able to more than compete with the HSBC - you win some, you lose some - so any independent adviser will not mind you looking at HSBC etc and should be able to give you reasons to go for the deal they offer over the HSBC or allow you to walk away, no hard feelings.

Hope this helps

Joey_3

Thanks very much for such an informative response, that's really helped.

whiteflag_3

Why would you want an HSBC mortgage when there are so many better deals out there anyway?

The last company to use the "we dont pay commission to middlemen" as their only sales hook was Equitable Life and we all know what happened to them!

Dont think you call call HSBC a charitable organisation either!:rolleyes:

TangentMan

I assume though that brokers tell customers the lenders they have not included in their "whole of market" search?

Joey_3

whiteflag wrote:

Why would you want an HSBC mortgage when there are so many better deals out there anyway?

We don't necessarily, we just want to test the water with our current bank.

TangentMan wrote:

I assume though that brokers tell customers the lenders they have not included in their "whole of market" search?

I hope so, this was my worry too.

HelpWhereIcan

TangentMan wrote:

I assume though that brokers tell customers the lenders they have not included in their "whole of market" search?

You would hope so, but I am afraid that the answer in most cases will be no -unless they are asked. The debate about whole of market definitions has been acted out many times in this forum such as the sticky about Martins view on using brokers.

Ultimately, I think that the vast majority of people will get a better deal by going through a broker than they would be able to get going to one of the lenders I have mentioned, but until the general public becomes more agreeable to brokers charging a fee, this 'discrepancy' will continue.

Whether it is actually to the detriment of the consumer or not is another discussion altogether.

Hope this helps