What is Openwork? (in relation to mortgages)

stetanos

I have been using 3 advisers to get the best possible deal on a mortgage. When comparing them head to head, all are regulated by the FSA however one advertises itself as being part of Openwork Limited (being a new user I'm not yet allowed to post the URL). I have looked through its website, but the info seems to be mostly directed towards attracting new members rather than explaining to Joe public -me- what it all is. Does anyone know if membership to Openwork is somthing I should be holding in high regard?

kingstreet

In the beginning was Allied Dunbar, those of the flogging of unit-linked insurance products. Then came Zurich, taking over Allied Dunbar and naming it after the Swiss city.

Zurich Advice Network became a home for "brokers" to peddle mortgages and Zurich's life products as a tied agent.

ZAN was re-named Openwork in an effort to remove the idea of the tie from the consciousness of the public.

What you need to look out for are the following;-

- whole of market or independent mortgage advice
- access to the whole market for insurance products.

Have a look at the advisers' Initial Disclosure Documents. Each one should show what type of service, advice and remuneration is offered.

dunstonh

Avoid using openwork reps. They are notorious for having fee tie ins if you cancel a product later on. Usually amounts that have no link to the amount earned or any fee agreed.

Not only that, they are tied sales reps. You should never use a tied sales rep.

stetanos

thanks for the replies. So what i get from this is that the fact that one is a part of Openwork does not mean it is any better or that i have more security than any other FSA regulated adviser?

JL105

Hi Stetanos. Like yourself I am also an MSE newbie!

In the interests of transparency I'd just like to start by saying I am an Openwork employee. The reason for my post is because I believe the information posted lacks some relevant detail.

Our mortgage brokers actually do offer products from a whole of market lending panel - just like IFAs. The likelihood is that you can access exactly the same providers through both. Obviously different intermediaries are offered different 'exclusives' at different times, so the specific products you get offered may vary - that's why it's always worth shopping around.

Openwork is actually the UK's second-largest financial advice network, with over 2,000 advisers. You probably haven't heard of Openwork before because it's not a consumer-facing brand - Openwork's main clients are the advisers that you get your financial advice from.

It's true that many Openwork advisers were originally Allied Dunbar advisers - but that was 13 years ago. You can see a history of Openwork's development, including its name changes, on the Openwork website.

That's all - I just wanted to make sure you had the facts. That way you can make an informed decision. As a normal person like you, looking for a mortgage, I'd always put trust and transparency at the top of the list when choosing an adviser. Good luck, and happy mortgage hunting!

magpiecottage

dunstonh wrote: »

Avoid using openwork reps. They are notorious for having fee tie ins if you cancel a product later on. Usually amounts that have no link to the amount earned or any fee agreed.

If you look at this thread, you will see what DunstonH means. I actually saw the agreement and it was a blatant breach of FSA Principles 6 and 8.

dunstonh wrote: »

Not only that, they are tied sales reps. You should never use a tied sales rep.

This is because although the mortgage may be from the whole market, any life cover will not be so you are likely to miss out on the best deals.

dunstonh

There was a survey about 18 months ago that found that half the people that used tied agents thought they were using an independent. One of the most common methods tied agents use is to give the impression they are independent or whole of market is to use the fact they are with morgtages. They make a point of saying they can search the market for mortgages but dont mention insurance. The consumer believes that whole of market means whole of market for everything and not just mortgages.

jamesd

Stetanos, you should also consider mortgages that are only available direct, like First Direct. Commission-based mortgage brokers are unlikely to consider those products.

The "whole of market" phrase is misleading and more so in the case of a "panel" of lenders like that mentioned by JL105. Neither means the whole mortgage market will be checked and a panel means that even less than whole of market will be considered when checking the deals available for an individual, because the firms in the panel aren't continuously updated. Both typically exclude all mortgages that can't be bought via brokers. The lack is significant because the direct to consumer deals are often the best for those with good credit records and a good deposit.

Brokers that charge a fee instead of using commission are more likely to cover the whole mortgage market, since they get paid even if they can't actually make the sale but should instead tell you that the best deal for you is a direct one.

kingstreet

jamesd wrote: »

Stetanos, you should also consider mortgages that are only available direct, like First Direct. Commission-based mortgage brokers are unlikely to consider those products.

The "whole of market" phrase is misleading and more so in the case of a "panel" of lenders like that mentioned by JL105. Neither means the whole mortgage market will be checked and a panel means that even less than whole of market will be considered when checking the deals available for an individual, because the firms in the panel aren't continuously updated. Both typically exclude all mortgages that can't be bought via brokers. The lack is significant because the direct to consumer deals are often the best for those with good credit records and a good deposit.

Brokers that charge a fee instead of using commission are more likely to cover the whole mortgage market, since they get paid even if they can't actually make the sale but should instead tell you that the best deal for you is a direct one.

James - that's why I differentiated between whole of market and independent in my earlier post. Independents will charge a fee and source from direct-only deals as well as those paying a commission. Many of us now offer commission, fee with commission refunded and fee only arrangements on our IDDs to enable us to get across our commitment to finding the best deal for the borrower.

In my case, if I source a direct-only product, I write it as an advised case, so the borrower benefits from the protection of the advice process while getting the benefit of going direct. Obviously this has to be covered by a fee payment as the regulatory burden on the business can't simply be placed at the door of those choosing the commission route.

The more sophisticated borrower will of course feel confident in going direct as they would not necessarily benefit from the advice process and don't necessarily need the same regulatory protection.

Intermediaries operating from a small panel, getting commission and charging a fee and getting enhanced commission by being tied to a single protection provider would appear to be the furthest point away from the perfect scenario for the average borrower.

jonathanmiller

dunstonh wrote: »

Avoid using openwork reps. They are notorious for having fee tie ins if you cancel a product later on. Usually amounts that have no link to the amount earned or any fee agreed.

Not only that, they are tied sales reps. You should never use a tied sales rep.

Some sweeping generalisations on this thread.

Worth noting that the 'notorious' statement would be nothing more than pub talk along with the 'flogging' of policies and 'peddling' of mortgages.

The larger mortgage networks can obtain a number of exclusive deals that IFAs cant get rewarded from the quality and levels of business they write.

Openwork advisers can offer the

dunstonh

Worth noting that the 'notorious' statement would be nothing more than pub talk along with the 'flogging' of policies and 'peddling' of mortgages.

If you do a forum search you will see that the reclaiming of commission has appeared more than once for them.

The larger mortgage networks can obtain a number of exclusive deals that IFAs cant get rewarded from the quality and levels of business they write.

Rubbish. Thats just sales talk. You are not an openwork sales rep by any chance?