fees free mortgage brokers

AndrewSmith

Agreed,

But what I get very annoyed at is the insinuation that fee charging means better quality of service or advice, which is of course complete rubbish. Anyone with anything more than 3 brain cells knows this.

Fees free or fee charging has no bearing on the quality of advice or service offered.

Each has it's own merits to the individual brokerage. Personally I have no competition from either fee free or fee charging brokerages so do not concern myself with such issues. I do not charge nor do I push insurances, but have the option available to clients should the wish. What is interesting is the number of clients who will actually 'ask' me to arrange their insurances for them. I am pleased to do it for them and happily receive the commission for the sale however the survival of my business is not dependant on the sale of insurance products, and yes I earn a very comfortable living from my work.

The choice of which business model is best will largely depend on the business concerned and their costs etc. It will also depend on the business structure and the average size of case they attract. I am lucky covering Hampshire, Wiltshire, Surrey, Berkshire, Oxfordshire, Sussex, Gloucestershire etc where my average mortgage size id between £170-£230,000 therefore eliminating the need for me to charge the client a fee.

On the issue of advising based on which pays the higher commission. Each recommendation must be justified. I personally use a laptop in from of the client and show them the sourcing results directly from the screen filtered into monthly payment order, cheapest first. I work on the basis that if the job is done correctly this time they will return as clients again and again. Just because a broker is fees free does not mean they automatically choose based on commission levels. Again, this is a pathetic attempt to discredit the fee free broker model in favour of charging fees.

There will always be brokers who have their own interest at heart above that of the client however this applies to both fees free and fee charging. Neither is better than the other, neither offers better quality of service than the other automatically.

Incidentally, remember the Whistleblower program which included a mortgage broker in london who was falsifying passports etc to obtain mortgage for clients? I do believe he was a fee charging broker.

Conrad

toonfish wrote:

Once again you are tarring all the fee free brokers with the same brush, and also hiding your status as a fee charging broker. Where do you come up with this business of "manipulating the KFI".

Obviously you would never place a client with anyone except the company offering the lowest procuration fee?

Ive been around the business over 15 years.

Every employed broker has strict insurance commision targets to meet. If they dont make the grade they're out. Many thousands of brokers that make so much of being 'fees free' (they lurk in most estate agents) FORGET to say "yes we're fee's free but please understand from OUTSET that I will try very hard to sell you as much protection as I can. Thats disingenuous.

The equivolent would be a large sign saying 'free tyre fitting service' howver once you innocently got in there they would do thier best into trying to sell you a 5 year warranty. Its not treating customers fairly.

Why dont the large chains of agents include on thier signs advertising 'free mortgage service' another prominent statement declaring 'but we will do everything we can to sell you a critical illness plan'?

It is well known that those clients refusing insurance then find they are pretty much ignored when it comes to case progression... who wants all that work and worry for a £250 lender commision that might not even be paid (as we all know many house sales and mortgages never go on to complete)?

I maintain you get what you pay for in this life and its about time the 'free' brokers came up to date.

Would you expect a Doctor to work on Commision?

Conrad

arkie wrote:

As a fee charging broker, i always place the client on the best deal, im not commission driven and I dont push insurance sales, I used to be a fee free whole of market broker but i needed insurances sales to make ends meet, i have stopped selling insurances, started charging fee's and now the appointments are easier because I tell the client that I do not sell insurance.
There is nothing wrong with charging fees or not charging fee's , everyone to their own , but I can assure my clients that proc fee's do not come into the equation.

iam a mortgage adviser

Snap.

On your point 'there is nothing wrong with charging or not charging' I would not agree though. In life there is a less correct way to do anything.

Fee charging brokers are LESS inclined to be under pressure to maximise comission earnings. Thats not to say some wont still try and maximise comission earnings, its just less likely as they can make a decent living without comission.

Advice and commision do not mix. Imagine asking your Doctor or Architect to rely on comission........ This would cause them to act in different ways, its simply human nature, we all want to earn as best we can so as our family is more secure.

toonfish

Conrad wrote:

Ive been around the business over 15 years.

Every employed broker has strict insurance commision targets to meet. If they dont make the grade they're out. Many thousands of brokers that make so much of being 'fees free' (they lurk in most estate agents) FORGET to say "yes we're fee's free but please understand from OUTSET that I will try very hard to sell you as much protection as I can. Thats disingenuous.

The equivolent would be a large sign saying 'free tyre fitting service' howver once you innocently got in there they would do thier best into trying to sell you a 5 year warranty. Its not treating customers fairly.

Why dont the large chains of agents include on thier signs advertising 'free mortgage service' another prominent statement declaring 'but we will do everything we can to sell you a critical illness plan'?

It is well known that those clients refusing insurance then find they are pretty much ignored when it comes to case progression... who wants all that work and worry for a £250 lender commision that might not even be paid (as we all know many house sales and mortgages never go on to complete)?

I maintain you get what you pay for in this life and its about time the 'free' brokers came up to date.

Would you expect a Doctor to work on Commision?

not all fee free brokers are employed, or have sales targets though. No-one mentioned insurance sales apart from you (again).

Your insinuation was that fee free brokers, including myself, always go for the highest proc fees. I would be very surprised if my business spread is as not as wide as any fee charging brokers

AndrewSmith

Conrad wrote:

Advice and commision do not mix. Imagine asking your Doctor or Architect to rely on comission........ This would cause them to act in different ways, its simply human nature, we all want to earn as best we can so as our family is more secure.

Some health trusts do if fact incentivise GP's and doctors to prescribe certain treatments over others and pharmacutical companies heavily incentivise the use of their brand of medicines/treatments.

Architects sometimes do have favoured suppliers of building materials used when pricing up a set of drawings, from whom they receive incentives or kickbacks (the term used in the industry is 'nov's'. A building supplier will 'nov' the architect a plasma screen for example if they recommend their firm as a supplier and it results in sales of a pre-agreed level.).

Advice and commission exist everywhere in daily life, nothing is without cost.

It is ridiculous and laughable though to suggest that fee free is not the correct way of operating a mortgage brokerage.

payless

argument is getting confused,

there's a difference between fee charging ( usually on top of commission) & fee based ( commission rebated to client )

the former is just as likely ( or not ) to be commission bias as a "fee free" broker

Conrad

toonfish wrote:

. No-one mentioned insurance sales apart from you (again).

Fee free's brokers use the fee free angle as a hook, however this is disingenous and not in the spirit of fairness as they dont the same prominance to the fact that they rely heavily on insurance commision, which dear client pays for. In other words clients act under a false pretense as they only had 1/2 the story.

Can you not see the dichotomy here?

Its like a boat vendor advertising 'free boat trips' then once you are onboard presenting his true agenda. the £30.00 lunch fee!!


As for fees free brokers who also dont sell insurance, I struggle to see how service / advise is'nt compromised given the high volumes of business needed. Perhaps a few angels out there dont mind working for nothing.

irishwench69

Well in answer to the OP (and this is also what I have just done ), I would ask around a couple of brokers, including L&C if you like.......then compare the deals you get.

In my situation, they came back with the same deal, so I felt a little more reassured. Admittedly the market search was a little more restricted for me (100%, FTB, slightly blemished hx), but with illustrations from a couple brokers, it was all a little more reassuring.

I don't think there is any problem with a fees free broker, but I guess that's my own personal view with no kind of professional status / experience to back me up with!

HTH,

IW x

AndyWallace

Fees free or fee charging ultimately depends on the individual broker's circumstances. Working from a small box room at home = no overheads. Working from a retail or industrial unit = rates, additional bills etc.

The most honest way of ever getting good advice is as Payless has stated. The broker works for a set fee per case. If the commission falls short, client pays the difference. If the commission is more, then part of the commission is refunded.

Andy.

Rick62

So Conrad, do you rebate the lenders commission to all your clients?