Fees free or fee based advice. Which is best?

No-Shenanigans

Hi all,

I'm a long time lurker and I'm finding it difficult to start this thread. I know my views are going to be contentious as this subject has been touched on before and goes against Martins views and some of the brokers on here, however, over the comming year I think it's going to become increasingly debatable wheather the fees fee route is the best way to go. Do any other brokers/users have any views on this?

Amongst others, with the likes of Cahoot, Egg, ING, YBS, Britannia, Direct Line, Hinckley, HSBC, Stroud & Swindon, Giraffe, BW offering direct only products, I think a lot of homeowners are starting to missout by going down the fees free route.

As many of the other large financial websites which receive 30% of the commission generated, I know Martin has always been a great supporter of L&C and the fees free route, however, I find some of their advistising underhand. Take www.iii.com for example, L&C's best buy table currently shows a discount of 4.33% which I don't believe is available and a direct line one at 4.44%. When was the last time L&C advised a client to arrange a mortgage with direct line? This seems underhand to me and against the spirit of the FSA's "treating customers fairly". I have noticed this has not been an isolated incident.

MortgageMamma

Technically, even if calling itself whole of market, a broker is only obliged to recommend the products that are available to him if fee's free. most brokers will offer you a choice of fee's or fee;s free - they have to , to claim independence. I personally work on a fee's free basis except on very complicated cases that will take a lot of my time - but I do offer my clients a choice. However, even if a client opts for the fee's free, I do always make them aware of the lenders who do not pay commission and investigate the offering of those lenders with my other research. Not all brokers work this way though.

As for fees or fees free i dont think it will affect the standard of advice, so long as you ask the broker concerned if they will include none commission paying lenders in their research also.

MortgageMamma

Sorry mate I posted all that before looking at your signature - perhaps you should state you are an adviser at the beginning of your post? also, have you thought of discussing this on cherryplc? I'm sure there's an existing discussion on there you will find most useful if you have not read it already

toonfish

we're in a similar boat, and charging a small fee only if there is not any commission payable or if the amount is insignificant, to make the case worth processing.

Most are happy to pay.

herbiesjp

Welcome to the board

My business model is currently that of being a whole of market adviser and being fees free

My levels of business are sufficient to be able to support this method, as most of my business is either repeat business from existing clients or referrals from those same clients


As with any good business, if there is a hint of change, you have to be ready to adapt and change to what the market wants or dictates.

payless

I offer the choice -

This includes option of a small fee to include all lenders in my research ( refunded if we complete commission earnoinmg business)

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most take the totally fees free route

lurker53

L&C guide states

3) Will they put your interests first? Your broker will receive a commission from the mortgage lender for recommending their product. Not all mortgage lenders pay commission, however. If there was a mortgage that really suited you and paid no commission, would the broker still recommend it? A reputable mortgage broker will keep your interests at heart at all times. Address this issue with them before proceeding.

It goes without saying that L&C Mortgages fulfills all of the above criteria. Calls are free, advice is clear, simple and unbiased, and there is no fee charged at any point for the service received.

When I called they completely missed the clear winner based on rates/ fees that was available at the time ( Brit BS).. rather an exclusive was offered at a worse rate .

I think if they advertise in the way they do- as quoted above - they should publish a details of % times they deal with a non fee paying lender.

MortgageMamma

I agree with you lurker. I've put them to the test a number of times and quite frankly I ended my mystery shopping at a bit of a loss. I really do not know what the fuss is about. I have had clients come to me who have been to L&C who:

Have been told they can't get a mortgage at all
Been given an absurdly low lending amount
Been denied an agreement in principle
Been told they are medium adverse and Iplace them with prime lenders
Not had calls returned
Been told to go direct because their mortgage is too small


As I have stated previously, and I stand by this statement, it is a chicken farm full of hungry pressurised highly targeted sales people. Nobody can provide a good service like that. A good adviser gets to know their clients really well, and takes their time and listens properly to the client.

kenshaz

The Mortgage Guide: Free Printed or PDF MoneySavingExpert Guide Covering first-time buyers, buy-to-lets, and mortgages for those who have had credit problems. This is a free printed 30 page step-by-step guide to getting the cheapest and best mortgage (also available as an instant PDF download)

AndyWallace

kenshaz wrote:

The Mortgage Guide: Free Printed or PDF MoneySavingExpert Guide Covering first-time buyers, buy-to-lets, and mortgages for those who have had credit problems. This is a free printed 30 page step-by-step guide to getting the cheapest and best mortgage (also available as an instant PDF download)

LOL. You're really funny. Like a Jack Russell snapping at the ankles of a mortgage broker.

Andy.

EdInvestor

MortgageMamma wrote:

I agree with you lurker. I've put them to the test a number of times and quite frankly I ended my mystery shopping at a bit of a loss. I really do not know what the fuss is about.

Mystery shopping, now there's a thought. :idea:

Maybe someone (not a broker) could try that - get some advice here from the in-house contributors, and then call up and get the free check from L&C.

Then report the results

On the other thread started by carlac, the poster effectively got the same advice here as he received at L&C.

Would the deal have been any cheaper via L&C than through one of the brokers on here?