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Why the fees-free "mania" on this site?

I am not, nor have I ever been, a financial intermediary so maybe I am missing the point, but why do people on this site seem so resentful about paying fees to brokers for mortgage advice?

Advisors (the good ones anyway) can make sense of an increasingly complex market place and guide their clients towards the most appropriate product, which I would expect would be based on a more thorough analysis than a comparison of APR's in the newspaper.

The broker fees I've seen mentioned (around a couple of hundred quid) seem pretty paltry in context of the average mortgage, especially given the work involved. Is it not silly to chose one broker over another simply because one charges a £200 for his or her advice? If the advice is superior, is it not worth paying for?

Then again, I may be wrong....
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Comments

  • dunstonh
    dunstonh Posts: 120,198 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Some on the site seem to think that moneysaving is more to do with paying nothing rather than paying to get value for money.

    There is also generally an anti adviser attitude at times with some posters. This can lead to the advisers giving the correct information being ignored and others giving incorrect information being thanked for their "advice".
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Thanks Dunstonh. What you say is pretty much what I was thinking.

    Do you think that the increasing number of places where borrowers can get data to make their own decisions (sites like this, best-buy tables in the press etc) will reduce the future relevance of mortgage advisors, or at least those who charge for their services?
  • dunstonh
    dunstonh Posts: 120,198 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Do you think that the increasing number of places where borrowers can get data to make their own decisions (sites like this, best-buy tables in the press etc) will reduce the future relevance of mortgage advisors, or at least those who charge for their services?

    The data providers charge for their services and a number of mortgages are broker only. Whilst the data providers can earn an income for their data and services, they are not likely to offer it for free. They do tend to offer snippets of information but its not as detailed as the info brokers get.

    Someone posted in the insurance forum the other day asking if BUPA was the best provider. You got a few people respond saying yes. I fired open the research software and within minutes found the bupa was not the best and could see exactly which areas all of them did or didnt cover. I could also see which was best. So, if that person takes the "free" advice from the well intentioned but inaccurate forum posters, they wont be getting the best, which was what they were after.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Leon_W
    Leon_W Posts: 1,813 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    There is also a mania regarding "fee free" remortgages. I'm not talking about the broker fee here, just the lenders arrangement, valuation, and possible legal fees.

    Nothing in this life is free. All the lenders do is factor in the costs and add a bit on for good measure.

    Many many of the remortgages I arrange, the client is better off paying one, or all of these fees, to secure a much better rate.

    You can lead a horse to water .................
  • MSE_Martin
    MSE_Martin Posts: 8,272 Money Saving Expert
    Part of the Furniture 1,000 Posts Combo Breaker
    I am a strong supporter of fees free brokers. This doesn't mean the advisor doesn't get paid - it means the advisor receives commission only and provided they are whole of market you should be getting the service.

    Why wouldn't you go to a fees-free whole of market broker?

    I would ask the question the other way round - why because you are paying a fee on top of commission (or instead of in some cases) do you assume you will get a better service? That does not add up either.

    Judging the service level of a broker is tough. Some is bedside manner, but judging the technical competency is tough - those capable of making those finite judgements tend to be those who don't need the advice.

    There are many great fees-free, whole-of-market brokers out there, giving best advice, across the country. And this is a MoneySaving site - thus the idea is to save money - not paying a fee in this scenario certainly does that.

    So let me say loud and proud again.
    "Don't go to your bank to get a mortgage - it'll flog you its own products. Use a fees-free whole of mortgage broker to help."

    Is there a mania spreading through the site about this - I certainly hope so, it means the message is getting across. Please read my 'mortgage brokers' article for more details.

    Martin

    PS Fees-free mortgages is an entirely different story - and to be honest, thankfully, I've not spotted any mania about that on here!
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
    Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 000
  • Leon_W
    Leon_W Posts: 1,813 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Martin

    RE: Fees free mortgages.

    I only found this site recently and very good it is too. It's just an impression I get when reading these threads that just because lender X has a deal with no arrangement fee, valuation fee, and is offering free legal fees that this has to be a "good" deal. They aren't. The larger your mortgage the worse they are. Just an observation.

    Your point about whole of market, fee free brokers is spot on though.
  • I got completely slated when I paid an Insolvency Practitioner to manage my Bankruptcy. It came to four figures in fees and I am still having to pay her but she will take the money on a as a when basis.

    The thing is I could get no sense from the charitable sources and as I suffer very badly from depression and anxiety I wanted someone to bear the brunt of the creditors and script me for the OR. Ok in the end I didn't need her to tell me what to say to the OR but at least she could come with me and made me feel less afraid and alone.

    She is a financial lawyer and has seen the credit world from both sides of the fence. Her advice to me was invaluable, she enabled me to have a stress free BR and at the end of the day that made it worth paying for to me.

    Louise
    Nobody is perfect - not even me.
  • Thanks to you all - makes sense. I think what I learned from this is that different arrangements work for different clients and perhaps one model doesn't suit all. A case in point is the previous poster who spoke of the comfort and value they got from using an insolvency person, something which many on this site disapproved of.
  • Tomthumb
    Tomthumb Posts: 1,102 Forumite
    I think it's because we are so used to being able to make informed choices ourselves. If you think about most other services that we are offered such as insurance, savings, credit cards, utilities etc... we are able to compare these fairy easily through comparison sites and even gain cashback for choosing certain products.

    I agree that mortgages are too complicated and difficult to compare so an advisor is probably the way to go but it's frustrating that you can't just simply compare them and make the choice yourself. I'm currently trying to get a commercial mortgage and that's even more tricky - no one seems to want to give me a direct quote for an interest rate, they're all really cagey?!?

    I think they should simplify the whole thing! (I think ingdirect are trying to do this)
  • If anything mortgage products are becoming more complicated and offering more and more features, which, if understood properly is an advantage to a consumer. Where there is a need, it will be met by a lender - and peoples needs in this day and age are so diverse that it would be impossible to simplify mortgages (or any financial product for that matter) - its just natural progression. Unfortunately not everybody can have the level of knowledge and expertise as a broker - so thats just another example of a need in the marketplace is being fulfilled.

    If a broker is fee's free there is no reason whatsoever not to use them, and every reason to use them.

    As for the fee charging/fee's free broker - mortgage fee's/fee free mortgages - its all down to the individual preferences and opinion of the client which route they take - I have been both fee charging and fee free in my career, and it made absolutely no difference to the amount of business I secured or the quality of advice I gave to my clients.

    The most important factor in my opinion when a client selects an adviser is that he selects an adviser that ADVISES, rather than one that SELLS. There is a big difference, and in my opinion its usually the smaller local companies that offer personal advice and are a great support to their clients, and the larger companies - often telephone based that SELL the mortgage to a client. The reason for this is they are working in a targetted environment, and therefore are under pressure to perform and meet targets. They also have to take on more cases in shorter time as they do not receive a good proportion (if any) of the mrotgage commission and to make a decent living they have to work much harder. This in turn impacts the quality of service.
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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