Fiancial Advice fees

robsmith1234

My partner and I recently sought advice from an independent financial advisor regarding a mortgage. We met with the advisor in a local estate agent's office and agreed with him at the outset that he would earn his fee on a commission basis. The advisor submitted a mortgage application with RBS. The very next day my partner and I decided not to proceed with the mortgage as it wasn't affordable. We immediately contacted the advisor and he stopped the mortgage application. However, we have now received a letter from him demanding £200 for his services. Are we liable for this fee?
I would welcome any advice on this matter.

opinions4u

Fees should have been clarified prior to you proceeding.

You should also have a Key Facts document that states what fees can be charged and when you become liable for them. Read it carefully.

In this case, you have used somebody's time and professional services and then decided to back out. If they have disclosed this fee up front then you are liable. If there is no record of this fee, then you should state that as the fee was never disclosed you don't feel you should be liable for it.

It is not unusual for an adviser to charge no fee if a case proceeds and a commission is earned, but to have a clause that means you should pay them if you pull out.

Would you expect to spend 2 hours in the company of a solicitor and not be charged?

dunstonh

Working on independent basis means fee based. These fees are normally shown in the terms of business offered at the start. It is very common to be charged for work done to date if you withdraw.

However, we have now received a letter from him demanding £200 for his services. Are we liable for this fee?

If you are liable for it then yes. If you check the terms of business issued you will see if there is a charge levied if you do not proceed.

You dont get many independents working with estate agents nowadays. They usually have in house sales reps. Its mainly only the independent estate agents that still use independent advisers.

GMS

You should have been provided with an Initial Disclosure Document (IDD) or a Combined Initial Disclosure Document (CIDD) at the outset which would detail the fees payable and when they would become due. You should have also signed a fee agreement.

Key Facts Documents should also show fees and should match IDD/CIDD

If the fees were agreed then you are liable. If not you have no legal obligation but there may be a moral one. Only you can decide that.

magpiecottage

Why do you say the mortgage is not affordable?

Generally, this is something that the adviser and/or lender will assess.

If it is genuinely not affordable then you would have grounds for complaint but not if you simply baulked at the amount.