IFA issue - not sure if FSA can help...

quietdesign

hi...

just remortgaged a buy to let house in flats with aldermore - my initial advisor who doesn't charge (ie is paid by the lender) told me that i would have to go through a second broker as lender only deals with speacific approved IFA's on their books... i did this however this lender charged 1% fee (+£500) which i wrongly assumed was because aldermore weren't giving him a kick back (they did - 1%)...

anyway - i now find out (post completion) that i could have gone direct to aldermore all along and so would not have been liable for the fees etc...

i am writing a letter to complaint to both IFA's and withholding the fee...

is this the best course of action, i am unsure if the FSA / financial ombudsman can get involved as its a commercial (i assume) mortgage...

any advice gratefully received...

kingstreet

BTL business isn't regulated by the FSA, so you have no consumer protection options. You can however take the adviser to court, if you have a contract issue.

Aldermore does not accept business directly from the public and only accepts business from some, not all, advisers, so I don't think you've been misled.

http://www.aldermore-mortgages.co.uk/customer.html

Aldermore only offers mortgages through brokers. In order to find a broker registered with Aldermore please click here

dunstonh

anyway - i now find out (post completion) that i could have gone direct to aldermore all along and so would not have been liable for the fees etc...

irrelevant. If you employ someone to do a job and found out later you could do it cheaper using someone else or another method then its too late.

i am writing a letter to complaint to both IFA's and withholding the fee...

Did you sign a fee agreement?

quietdesign

thanks kingstreet however you are wrong - aldermore will deal directly with customers on the commercial side and i have spoken to them and they have confirmed this...

quietdesign

thanks dunstonh...

i did sign a fee agreement, and i understand your point, however, its not a case of finding a cheaper method at a later date, its a case of paying someone for professional advice and then finding out that the advice is incorrect and in their favour... ie they have a vested interest in deceiving you...

Lokolo

quietdesign wrote: »

thanks kingstreet however you are wrong - aldermore will deal directly with customers on the commercial side and i have spoken to them and they have confirmed this...

Confirm it in writing, the person you were talking to could have been new and may not have knew.

Senior_Paper_Monitor

I can confirm that Aldermore will provide commercial funding direct to client - they also only deal with selected intermediaries, although most brokers can use 'packager channels' to do this.

A normal buy to let or any residential property falls under a different arm of Aldermore - these are all broker advised sales (no directs) and a limited panel, although again 'packager channels' could be used by most brokers.

I see no chance of recompense here - and while the OP states that he 'paid for profesional advice and it was incorrect ' I don't think he did, in that: the first broker doesn't charge fees and simply referred the OP to a second as he didn't believe he could process the enquiry - the second said yes I can, its this much and did it.

kingstreet

quietdesign wrote: »

thanks kingstreet however you are wrong - aldermore will deal directly with customers on the commercial side and i have spoken to them and they have confirmed this...

You said you'd remortgaged a BTL and that doesn't constitute commercial lending on my planet, but you are correct that commercial lending is available direct.

Leon_W

Aldemore will look at commercial lending (shops, pubs, businesses) as a direct from customer proposition on a case by case basis.

All BTL business is through a broker only and the commission is 0.45% not 1%, so by your figures the maximum gross would be about £225 which, realistically, any broker who wants to stay in business is not going to want to bother with for the work involved. A fee of £500 was charged.

This all seems pretty reasonable to me.

You obviously sought advice as I do not believe that you would have picked a fairly obscure lender such as Aldemore to approach directly anyway, this was recommended to you by the broker as he would know that you fitted their criteria.

Therefore, as long as the broker has the required paperwork such as a fee agreement or an Initial Disclosure Document or a Key Features or an Aldemore mortgage offer detailing a £500 broker fee, I feel it may be you who will be receiving a complaint about witholding a fee which can ultimately be persued through the court.

quietdesign

thanks leonw

however i can't have made myself clear re numbers...

the £500 fee was an upfront fee to check my paperwork...
he was definately paid 1% by aldermore (of £300K)...
and he is changing me directly another 1% (of £300K)...

there was no upfront notice of the aldermore back hander...

maybe my issues is with the initial IFA as he is the one who told me i had no other choice but to go with the second broker...

i am taking legal advice now...

Leon_W

No problem quiet.

I thought the 1% (£500) would equated to a mortgage size of £50k.

I still think that you're onto a loser though. BTL isn't regulated.

The fees you have been charged £500 + 1% (£3000) = £3500 (is that correct ?) I would consider too high but they are not out of the ordinary or illegal. And it appears you agreed to them.

You seem to have the beef with the commission that Aldermore paid, but that is neither hear nor there, you couldn't have got the deal any other way.

I'm pretty sure that on Aldermore's mortgage offer it would say what the commission paid was, and if it did and you subsequently accepted the offer then you really haven't a leg to stand on.

All IMHO.