Is my Mum right to be cynical about a Mortgage Broker

jamesd

This seems like something that Sesame's trademark people would object to unless it's being made very clear adjacent to the award that they are no longer using Sesame services. That's because it's presumably harming Sesame's good compliance reputation by charging a fee not meeting Sesame guidlines, so consumers may trust Sesame as a name indicating good compliance less.

adwat

Yes

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grey_gym_sock

(reviving an old thread - not sure if this is a good way to do it, but what i have to say is about selecting mortgage advisors, and Sesame ...)

i've been looking at details of some mortgage advisors on https://www.unbiased.co.uk. most advisors are "Fees or commission", but fewer say how much their fees are, or are completely clear about the range of mortgages which they advise on (even after looking at their own websites, where they exist).

two advisors charge a 0.5% fee, one charges 1.0% (!), one charges £1000 (all these are with commission fully rebated). and in this thread 0.4% has been called excessive. £1000 seems fine to me (this is in london).

the £1000 advisor says they are a member of Sesame. now on Sesame's site (https://www.sesame.co.uk/) it says: "Sesame offers a truly whole of market lending panel boasting some of the most attractive procuration fees in the market and access to the latest exclusive products." the word "panel" is what's bothering me here: are they talking about a panel which "represents" the whole market, i.e. in plain english *not* really whole of market (if we ignore the FSA's attempts to redefine the english language)?

dunstonh

two advisors charge a 0.5% fee, one charges 1.0% (!), one charges £1000 (all these are with commission fully rebated). and in this thread 0.4% has been called excessive. £1000 seems fine to me (this is in london).

It isnt that it was excessive (although it could be on a large mortgage). It was the fact they were operating under the "independent" tag and setting a fee that is higher than the typical commission option. £1000 is not unreasonable for city or complicated.

the £1000 advisor says they are a member of Sesame. now on Sesame's site (https://www.sesame.co.uk/) it says: "Sesame offers a truly whole of market lending panel boasting some of the most attractive procuration fees in the market and access to the latest exclusive products." the word "panel" is what's bothering me here: are they talking about a panel which "represents" the whole market, i.e. in plain english *not* really whole of market (if we ignore the FSA's attempts to redefine the english language)?

If I understand Sesame's mortgage proposition correctly, it is that their members are offered two options. One of which is independent. The other is panel. It is up to the member firm to decide. Their terms of business/key facts document will state their level.

grey_gym_sock

dunstonh wrote: »

It isnt that it was excessive (although it could be on a large mortgage). It was the fact they were operating under the "independent" tag and setting a fee that is higher than the typical commission option. £1000 is not unreasonable for city or complicated.

ok, i was inaccurate there.

if £1000 could be a fair fee for advising on and transacting a mortgage, what would be fair for advising the client to apply for a certain direct mortgage? i.e. what proportion of the work does the latter require?

dunstonh wrote: »

If I understand Sesame's mortgage proposition correctly, it is that their members are offered two options. One of which is independent. The other is panel. It is up to the member firm to decide. Their terms of business/key facts document will state their level.

right, in that case it's worth pursuing further.

CKhalvashi

grey_gym_sock wrote: »

ok, i was inaccurate there.

if £1000 could be a fair fee for advising on and transacting a mortgage, what would be fair for advising the client to apply for a certain direct mortgage? i.e. what proportion of the work does the latter require?


That one I really don’t know the answer to, however I will state that we paid £1000 on a 125% in 2003, which had the mortgage at 0.69% until we paid it off! :eek:

It’s sometimes worth paying more for a better rate!

CK

dunstonh

if £1000 could be a fair fee for advising on and transacting a mortgage, what would be fair for advising the client to apply for a certain direct mortgage? i.e. what proportion of the work does the latter require?

The biggest cost to the adviser is the liability for the advice. Submitting the actual application is a smaller issue. So, I wouldnt expect any reduction. You are buying advice.

grey_gym_sock

dunstonh wrote: »

The biggest cost to the adviser is the liability for the advice. Submitting the actual application is a smaller issue. So, I wouldnt expect any reduction. You are buying advice.

fair enough.

it is the advice that i value.

talking of liability, when people do have claims against advisors, how does this work if they are no longer in business? (presumably not uncommon, given that many advisors are very small businesses, and mortgages last a long time.) do advisors insure against claims, and the claim would be against the insurer? can one check that advisors are insured?

the fallback is to make a claim to the FSCS? with a limit of £50k?

dunstonh

how does this work if they are no longer in business?

if they were self employed or a partnership then if redress becomes payable then personal assets of the adviser (even if its been decades since they have been trading) can be used.

do advisors insure against claims,

yes

can one check that advisors are insured?

its a requirement to trade.

Thrugelmir

grey_gym_sock wrote: »

it is the advice that i value.

Ultimately its the customer that decides to proceed or not. No one is forced to sign the application.