Fee charging Brokers : Rebate Commission

dukesy_2

1st things 1st.....

If his goes against the rules in any way, MODS please feel free to close/delete.

What I am wondering though is this

I appreciate that there are some brokers out there who will charge a fee (say £200), adn then rebate the commission they recieve for placing you with a particular lender. I understand how that works.

However, I am wondering this.

I have FOUND the deal i am fairly sure I want. Would a "broker" simply act as an introducer. he makes money, I make money, Everyone is happy..

Have I over simplified this ridiculously, or is this too simple to be true.

(Bearing in mind that the "traditional" alternative is for me just to contact the mlender directly. Same deal, Same Criteria, Same everything)

Also, it is worth pointing out that I will insist on sorting out my OWN life/ASU etc. (Unless the broker can beat internet rates hands down)

herbiesjp

You will indeed find brokers happy to place the business for you in that way.

However, as you rightly say, you could equally also go direct to the lender

dukesy_2

That kinda was my point.

I could go straight to lender, but if i find "Fred" the broker and he gets 0.35% Introducer fee (just over £500), why would i NOT go to him, and split the £500 "between us" ???

Or...

to put it another way :

WHY would I just go to the lender direct, if I can make £200 or so via an introducer ?

payless

In the past I've done a lot of partial rebate / fees offset by commission with clients ending up with extra back

The crux points

1. Some clients ask for a particular deal, when I know of something better...
if they have are instructing as execution only I should not be telling them!
So often you end up doing the full research anyway / doing on full advice

2. Case needs to be big enough to leave broker with enough for his work ( and costs) so not suited to small cases

dukesy_2

Thats what I was trying to get at !!!

From a client point of view,

1) thats what i am paying the fee for isnt it (Otherwise you wouldnt be earning it!

2) What would the "cut off point" be likeyl to be (150K?)


Im just trying to see if there is a way of getting the B Soc to pay for an expert intermdiary (maybe with a bit left over for me !)

payless

A broker should be confirming the service levels at outset..(advised . mudders the water the water if client says .. I want XYZ product ( unless you know of anything better) ...

AndyWallace

As a broker I would rather see someone go direct to the lender than me refund any part of the commission. In fact, I'd go as far as to say that if anyone ever asked for such a rebate I would send them packing anyway.

Unless of course a fixed fee has been agreed in advance with all commissions refunded. Still, the fee would be higher than £500.

Andy.

Rick62

Come on Andy, you expect to get a proessional fee in return for all the years of study and experience, for frequently saving your clients thousands of pounds, including having access to products that are not available directly and being accountable for your advice to the FSA and FSO.

AndyWallace

Rick62 wrote:

Come on Andy, you expect to get a proessional fee in return for all the years of study and experience, for frequently saving your clients thousands of pounds, including having access to products that are not available directly and being accountable for your advice to the FSA and FSO.

What many people on these boards forget is that they go to work and get paid for it.

I wonder how they would feel if their boss asked them to take a pay cut, because if it wasn't for him they wouldn't have a job in the first place.

Maybe my attitude is wrong, or maybe I wrongly believe that indemnified advice is valuable.

Also, by using a broker much of the paperwork, telephone calls and other anciliary administration is carried out on the clients behalf. In many cases the client will not have paid anything for this service so the advantage is to the client and not to the broker.

I don't believe that a single person has ever done me a favour by asking me to complete their mortgage. I believe I'm doing them the favour.

Grunt overwith for now.

Andy.

LisaT186

Rick62 wrote:

Come on Andy, you expect to get a proessional fee in return for all the years of study and experience, for frequently saving your clients thousands of pounds, including having access to products that are not available directly and being accountable for your advice to the FSA and FSO.

:rotfl:

payless

I know where you are coming from, although thousands of brokers either buy leads in , spend money on advertising or pay a % share to introducers- so one could argue that there is a argument for rebates in some cases instead...