Fee charging Brokers : Rebate Commission

dukesy_2

My question wasn not meant to start some form of Mortgage Broker Civil War :-)

All I was getting at is this

I have decided that I want Product XZY from ABC building Society

I can go straight to them and buy the product. Broker makes nothing, I make nothing

OR

I can go to Broker (remember i am NOT seeking Advice at this point), and he can make some revenue and rebate some of it

I am NOT saying the broker MUST do this, merely that they should have the ability to make a commercial decision based on the facts.

AndyWallace wrote:

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.

TOSH !!! This analogy simply is wrong. Perhaps a better one would be "would you like a second job which doesnt pay as well, but takes a lot less work " : (NB You dont HAVE to say yes )

payless wrote:

thousands of brokers either buy leads in , spend money on advertising or pay a % share to introducers

Exactly my point. The client is their OWN introducer !!!

payless

You need to decide if you want to say ... I want XYZ or I like the look of XYZ - what do you think.

If the latter - the adviser still needs to do all the work

why not try and agree a fee ( offset against commission )- leaving you a share , if they agree its the right deal , but a higher fee if they come up with a better deal ( still likely to get at least the fee covered)
---

the only risk is the broker might think you will take that info, and use it on similiar "agreement" with another broker

MortgageGenie

Not trying to start a debate... only trying to answer the op's question.

If you're sure you don't want to take advice then have a look at the article here: http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1101649966,86816,

AndyWallace

dukesy wrote:

TOSH !!! This analogy simply is wrong. Perhaps a better one would be "would you like a second job which doesnt pay as well, but takes a lot less work " : (NB You dont HAVE to say yes )

OK. So there you are making your £40K a year in your normal job and someone says "Do you want a second job. The wage isn't great I'm afraid, at a pound an hour, but it's much easier than what you are doing now."

You'd only ever accept the offer if you were desperate, and undervaluing yourself is therefore secondary to the benefit of the extra quid an hour.

I agree that it is a commercial decision and if you find someone to agree to it then that's fine. I wouldn't, personally.

I thought the analogy was quite appropriate by the way. There is no less administration in a non-advised sale as far as I am concerned. I would still transact everything to FSA procedures. I would still make all the necessary calls to third parties and I would still send out items recorded / special delivery.

Just because it is execution only, doesn't necessarily mean that you should prioritise this any less than your fully paid case. In terms of time allocated to either advised or non-advised sales there really isn't that much difference.

Andy.

payless

In terms of time allocated to either advised or non-advised sales there really isn't that much difference.

I spend a fair amount of extra time on product research / matching suitability on advised cases !

The argument about rebates is just an extension of the (topup) fees or no fees discussion.

If a case is large enough ( or lender pays more than usual) I have often provided a rebate - really a move to fee based ( with full rebate) basis ( some might say - proper independent!) , but in a way that may come across easier on the eye to the public. ( not one of those nasty fee chargers that ML tells us to hate!)

That said some brokers have higher overheads / smaller case size and different expectations.

I don't see it as undervaluing, as i said - it getting close to proper independent .

That said I must admit, I generally like to be the one offering terms - someone coming to me suggesting a split can be off putting.

AndyWallace

The short and simple is that he can go to money back mortgages and see what kind of service he will get.

A fixed fee with full refund of commission has got to be the way forward.

Andy.

Rick62

Personally I would not normally entertain any rebate. We, being the majority of brokers, provide a professional service and its swings and roundabouts. Sometimes I will spend a lot of time looking at something for a client that makes me nothing, I can afford to do that because on other cases I might make a big proc fee (if a large mortgage).

I'm not interested in chasing low quality work or providing an automated impersonal service, and splitting the proc fee on a £150k case would be the worst of both these.

EdInvestor

There are already plenty of execution only brokers doing exacxtly this in the investment/pension/SIPP area.

So it's just a matter of time before someone sets up as an e/o mortgage broker.Are the fees high enough yet for a profit to be made despite rebating part of them?That may be the key aspect.

Rick62

Would you use a lawyer on an execution only basis? Would you use a doctor on an execution only basis? Would you use an accountant on an execution only basis?

It would be easy to run an execution only brokers and give rebates, but it would not be providing any sort of service.