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Morgage Advisors/Brokers - how bad are they ?
Comments
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My mortgage advisor has been very useful- I wouldn't have known where to start with mortgages but he has helped us a great deal and spent a lot of time going through our options. Of course, we are still in the process of buying and things could go pear shaped but at the moment I am happy with the service and hope he gets a good commission from our lender because he has earnt it. I'm sure there are plenty of bad ones about but certainly not all of them.0
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I've always used mortgage advisors, via an IFA firm. I really can't praise my latest advisor enough. Good advice, helped increase my knowledge. Well worth it for first time buyers or for those of us who want guidance. Mortgage is the biggest debt you take on so to go without advice isn't something I'd want to do.
I got very consistent, detailed and appropriate advice and was very pleased with the amount of time my most recent advisor spent on us.Debt at highest: £8k. Debt Free 31/12/2009. Original MFD May 2036, MF Dec 2018.0 -
trulysaintly wrote: »George,
I've been a mortgage adviser for over 15 years - first of all working as an adviser, and then underwriter for two high street lenders including holding a lending mandate to approve mortgages up to £500k.
I'm fully aware of how my clients feel about my service, zero complaints in 15 years. That speaks volumes.
All advisers who operate in the mortgage market are monitored by the FSA to ensure that their advice is suitable and compliant.
There are 'dodgy' individuals in all walks of life, in all types of trades.
I wouldn't tarnish all builders with the same brush based on one experience, so why put us all into the same box?
As for the 'FSA licence to operate' - visit the FSA website George. You'll find on there that NONE of us can trade without the correct approved qualifications.
I would be interested to know what specifically are these required qualifications ?No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
Only a minority of brokers are independent. To get independent advice you pay a fee and get the commission rebated. Research has found that over half the people seeing tied/multi-tied agents actually thought they were seeing an independent.
So, was this one really independent or pretending to be?
The knowledge of independents usually wipes the floor with tied.
I am the only IFA posting on this thread and like most IFAs, I do not do mortgages. So, its probably better to not make such accusations.
I'm sorry but you are now starting to post as if you have an agenda. First your thread was about mortgage advisers/brokers. Now it seems to be against IFAs.
For the record, IFAs have the lowest number of complaints with the FOS as a distribution channel despite handling the majority of investment and pension transactions. So, whilst no-one can claim perfection, things are not that bad at all.
This particular individual specifically describes themselves as independent. I can't say exactly what this means in practice. But I am assuming therefore they can legitimately be called an IFA -- independent mortgage advisors are presumably a subset of IFAs ? The comments are specifically about mortgage advisor/s, so how should I refer to them -- IMAs ?
If this one's knowledge wipes the floor with the tied, then God help the tied.
It sounds from a few of the comments that my relative was unfortunate in their selection of mortgage advisor. They might be happy now in that they have probably secured their mortgage, even though it very nearly fell apart at a late stage. From my perspective the character allegedly advising them is severely lacking either in competence, or integrity, or possibly both. Their apparent success record in securing deals may be the way that they have got away with it thus far -- clients are probably likely to forget the problems once they are happy in their new home. I will advise my relative to look elsewhere next time that they need mortgage advice, but due to the personal friendship issue I fear that they may not take heed. If not, and if it were to go pear shaped again, I would not be so keen to get involved and to configure a solution.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
of course you can do some leg work yourself and look at comparison website, and then compare against what is being offered to you from a broker.
If you know what you are looking for, then I guess you cannot get sucked into buying something that does not suit you. Same as every transactions out there (from mortgages to buying sugar in the supermarket....)0 -
As a mortgage broker, the normal presumption of innocence until proof of guilt doesn't apply. We are all guilty by association as we advised people to take self-certification mortgages, or PPI, or NR Together deals. A blemish-free complaints record doesn't allow one to atone for the sins of the guilty.
There are various ways of answering the question given in the thread title. However, if I set out my experience and complaint-free record, anyone could legitimately point out that I would say that, wouldn't I...
There's masses of anecdotal evidence of poor advice. Some surrounds brokers, some surrounds lenders and there are poor solicitors and accountants too. We accept that and put in place schemes to compensate where compensation is appropriate. It's worth bearing in mind the compensation is funded by the industry. The good pay for the bad, so we have as much interest in weeding out the poor as the customer wishes to see it.
I am happy my advice and my service appears to satisfy my clients and they continue to return to me, year after year. I give my time and expertise on here free of charge and don't use the forum as an opportunity to tout for business.
I guess we have to ask ourselves, if brokers weren't here, would the lenders do a better job of "advising" customers? This seems to be the FSA's preferred mortgage distribution method, despite the banks' appalling record on just about every interaction they have with the consumer.I am a mortgage broker. 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. Please do not send PMs asking for one-to-one-advice, or representation.0 -
This particular individual specifically describes themselves as independent. I can't say exactly what this means in practice. But I am assuming therefore they can legitimately be called an IFA -- independent mortgage advisors are presumably a subset of IFAs ? The comments are specifically about mortgage advisor/s, so how should I refer to them -- IMAs ?
An independent mortgage adviser is not the same as an independent financial adviser. There are three classifications. Mortgage, investment class/financial advice and insurance.
Most IFAs no longer do mortgages themselves. Some do but most use mortgage advisers.
All advisers are required to give out an initial disclosure document that explains their status. The one that mortgage advisers give out is very different to the one that IFAs give out. The mortgage one has three tick boxes in section 2 which either state "whole of market", "limit number of lenders" or "single lender". Whole of market should be ticked if independent or whole of market. In section 4, this is where you can see if they are independent or not. Independent mortgage advisers have to offer a fee based option. Some only offer a fee based option. Some will offer a fee option and a commission option (to allow for people that dont want independent but whole of market instead). Fee & commission is not classed as independent.
the IFA initial disclosure document has no defined layout and IFAs are left to create their own document and layout. Typically though, IFAs will use a similar sort of layout and will indicate they are whole of market, offer fee basis but the examples of fees and comments in the disclosure document tend to be investment and pension related.
The mortgage document often includes a bit on insurance and this one can actually tell you more about the adviser status than anything else. With insurance there is no "independent" classification. It is referred to as a "range of...". The single tie option also appears in there.
Independent is classed as the best category. So, tied agents and multi-tie and even some whole of market advisers will try and pass themselves off as independent when they are not. Often they use the fact they can get mortgages from multiple lenders to hide the fact they are tied agents in other areas. A lot of the time they never use the independent word but the conversation gives that impression. We see it on the board here many times where someone has a whinge about an IFA and we end up finding out it is a tied agent.
Lastly, if an IFA is doing mortgages, then they are not doing it with an IFA hat on. They are doing it with a mortgage adviser hat on. If an IFA does do mortgages in addition to their normal roles then they have to offer an independent mortgage option to maintain their independent status (i.e. they cannot be an IFA and have a commission only mortgage option).
A mortgage adviser requires the mortgage qualifications. An FA/IFA have a higher level of qualifications and doesnt need the mortgage qualifications unless they want to do mortgages themselves.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.0 -
An independent mortgage adviser is not the same as an independent financial adviser. There are three classifications. Mortgage, investment class/financial advice and insurance.
Most IFAs no longer do mortgages themselves. Some do but most use mortgage advisers.
All advisers are required to give out an initial disclosure document that explains their status. The one that mortgage advisers give out is very different to the one that IFAs give out. The mortgage one has three tick boxes in section 2 which either state "whole of market", "limit number of lenders" or "single lender". Whole of market should be ticked if independent or whole of market. In section 4, this is where you can see if they are independent or not. Independent mortgage advisers have to offer a fee based option. Some only offer a fee based option. Some will offer a fee option and a commission option (to allow for people that dont want independent but whole of market instead). Fee & commission is not classed as independent.
the IFA initial disclosure document has no defined layout and IFAs are left to create their own document and layout. Typically though, IFAs will use a similar sort of layout and will indicate they are whole of market, offer fee basis but the examples of fees and comments in the disclosure document tend to be investment and pension related.
The mortgage document often includes a bit on insurance and this one can actually tell you more about the adviser status than anything else. With insurance there is no "independent" classification. It is referred to as a "range of...". The single tie option also appears in there.
Independent is classed as the best category. So, tied agents and multi-tie and even some whole of market advisers will try and pass themselves off as independent when they are not. Often they use the fact they can get mortgages from multiple lenders to hide the fact they are tied agents in other areas. A lot of the time they never use the independent word but the conversation gives that impression. We see it on the board here many times where someone has a whinge about an IFA and we end up finding out it is a tied agent.
Lastly, if an IFA is doing mortgages, then they are not doing it with an IFA hat on. They are doing it with a mortgage adviser hat on. If an IFA does do mortgages in addition to their normal roles then they have to offer an independent mortgage option to maintain their independent status (i.e. they cannot be an IFA and have a commission only mortgage option).
A mortgage adviser requires the mortgage qualifications. An FA/IFA have a higher level of qualifications and doesnt need the mortgage qualifications unless they want to do mortgages themselves.
Thanks for that explanation. If I have unwittingly referred to all IFAs when only intending to talk about mortgages then I should point out that I have very little experience, even indirect, of the former and am certainly not able to comment about individual instances.
This character certainly uses the word independent on their website. One hopes that this means they cannot be on a commission basis, at least without the client knowing, but I would venture that if there is any loophole around that they will have found it. Certainly on the basis of selecting a lender which was completely unsuitable regarding one major parameter, and recommending a conveyancing solicitor at the other end of the country, one does wonder.
If there are mortgage qualifications involved here then I do wonder how effective and comprehensive they are, and whether those holding them are required to keep up with changes etc. If these cover for example some of the subtleties of property law which would likely not be known to the layman but which one would expect someone providing a full service on mortgage advice to be aware of, then one wonders how this particular individual could have passed the exams. If did they did then they must have short memory retention, or exercise spectacularly bad judgement in deciding how to apply their knowledge, or perhaps believe in just ploughing on blindly down their chosen path of 'the best mortgage offer available' on the basis that any resulting problems further down the line are the client's to sort out.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
GeorgeHowell wrote: »Thanks for that explanation. If I have unwittingly referred to all IFAs when only intending to talk about mortgages then I should point out that I have very little experience, even indirect, of the former and am certainly not able to comment about individual instances.
This character certainly uses the word independent on their website. One hopes that this means they cannot be on a commission basis, at least without the client knowing, but I would venture that if there is any loophole around that they will have found it. Certainly on the basis of selecting a lender which was completely unsuitable regarding one major parameter, and recommending a conveyancing solicitor at the other end of the country, one does wonder.
If there are mortgage qualifications involved here then I do wonder how effective and comprehensive they are, and whether those holding them are required to keep up with changes etc. If these cover for example some of the subtleties of property law which would likely not be known to the layman but which one would expect someone providing a full service on mortgage advice to be aware of, then one wonders how this particular individual could have passed the exams. If did they did then they must have short memory retention, or exercise spectacularly bad judgement in deciding how to apply their knowledge, or perhaps believe in just ploughing on blindly down their chosen path of 'the best mortgage offer available' on the basis that any resulting problems further down the line are the client's to sort out.
Which lender was selected and why do you believe it to have been unsuitable? Some lenders have restricted solicitor panels so this may explain the distance for the solicitor firm. There are also massive comapnies offering conveyancing for competitive prices with lender cashbacks coveringthe bill. This could also possibly explain why the distance was in place. Without knowing the details it would be impossible to say. Equally it could be a firm who pay the adviser a referral fee.
The basic mortgage qualification is CeMAP (Certificate in Mortgage Advice and Practice). Once the qualification is obtained then mortgage advice can be given assuming the adviser is registered to do so. CPD is a huge part of the adviser's requirements now so the need to demonstrate current knowledge and understanding is ongoing.
The independent part is something I cannot comment on. As has been said this relates to fees so your relative needs to refer to the Initial Disclosure Document to see what the fee structure was. If it was wrong then a complaint should be made.
You mention bad advice due to one parameter. What was this?
Also how can you be 100% certain your relative has told you the full story? I am not suggesting they haven't but for instance there may be a CCJ or default in place which they are not too keen to reveal to a family member. Something like this could lead to a third party thinking poor advice has been given when infact it was not. Mortgages are not a 'one size fits all' product. Just because somebody has a 3% rate for instance does not mean another person will get it.I am a Mortgage AdviserYou 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.0 -
This character certainly uses the word independent on their website. One hopes that this means they cannot be on a commission basis, at least without the client knowing, but I would venture that if there is any loophole around that they will have found it. Certainly on the basis of selecting a lender which was completely unsuitable regarding one major parameter, and recommending a conveyancing solicitor at the other end of the country, one does wonder.
Whilst it means they have to offer a fee basis, that doesnt mean your family member employed them on such basis. Whilst I am fee basis for all the IFA work, my mortgage adviser still does about 70% of his mortgages on commission basis rather than fee basis. I keep pushing him to put more on fee basis but people still seem to prefer commission basis mostly on mortgages. This site is a good example. MSE promotes the services of commission paying, fees free mortgage brokers. It does not promote any independent mortgage brokers (where you pay the fee and get commission rebated).If there are mortgage qualifications involved here then I do wonder how effective and comprehensive they are, and whether those holding them are required to keep up with changes etc.
Mortgage regulation is light touch compared to investment regulation. There was glut of new mortgage advisers during the credit boom years as it was seen as an easy job. The exams are not difficult but sufficient. However, personality and work ethic are important and you can never underestimate experience. I would always suggest questioning any adviser (of any type) on their experience.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.0
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