Finding an IFA

Conrad

wendydarling wrote: »

Hello,

I would be looikng for them to be working on a commission basis.

It's bonus and commission that has lead to all the Banking scandals such as mis-selling PPI, fiddling LIBOR and so on.


No decent broker can work for commision alone - what if the best lender pays no commision?
Many of the best deal lenders do not pay commision.

People get a much fairer more transparent relaxed service if they are willing to pay for it you know!

dunstonh

I will just add that independent can be cheaper than whole of market despite you paying a fee as commission would be rebated and deals that commission only advisers would use would be included in the research.

So, on larger mortgages, the commission rebate can be more than the fee. Or the recommended mortgage deal can end up cheaper than the cheapest commission only deal over the term (even with the fee).

Fee option is unbiased and the widest range and very often the best value. The biggest problem is that most mortgage advisers dont work on fee basis as the consumer generally takes the same view as you have as they dont realise that fee is better.

To use the word "independent" the mortgage adviser must have a fee option.

wendydarling

Conrad wrote: »

It's bonus and commission that has lead to all the Banking scandals such as mis-selling PPI, fiddling LIBOR and so on.


No decent broker can work for commision alone - what if the best lender pays no commision?
Many of the best deal lenders do not pay commision.

People get a much fairer more transparent relaxed service if they are willing to pay for it you know!

Thanks for the reply, I was just going by the advice on the guide on this site. Not sure if you meant for your tone to come across in the way it did but it comes across as rather abrupt and rude from your last sentence.
I am more than happy to listen to everyone's advice and obviously I didn't know that 'people get a fairer more transparent relaxed service'

dunstonh

I was just going by the advice on the guide on this site.

It is a good guide but many of the articles are simplistic or contain incorrect information. Ever since the site got "big" it hasnt had the detail or updates that used to occur. Things like the lack of mention of PHI when talking about income protection or the complete dismissal of critical illness cover as a waste of time (despite the volume of claims that are paid out every year) or the lack of why an independent mortgage adviser can be better are just a few.


A quick example.....

Independent has a fee of £1000. Whole of market adviser has no fee.
Independent can access all mortgage deals (even those that do not deal with brokers). Whole of market will only include commission paying deals.
Independent recommends a 5 year mortgage deal which is £25pm cheaper. So, cost is £1000 but saves you £1500 over 5 years and makes you £500 better off.

For smaller mortgages, commission may well be better. For larger mortgages, fee based independent is a no brainer. Even if a commission deal is used by an independent, they rebate the commission. So, a large mortgage commission rebate can often be more than the fee.

bigadaj

OP the advisers here are justifying their position, which is fair enough but not necessary he at you what to hear.

The bottom line is that if people do some work for you they want to get paid for it, so it's therefore down to how much you value that work.

Brokers can be very valuable for people who have particular issues and problems but you stated earlier that you have a good deposit and credit history, if this also means you have no significant debts and are not stretching yourself in affordability terms then there is no reason you vantage go direct, check the comparison websites. Hsbc is always touted as the best rates, if you are low risk, but there have been issues with their customer service presumably bacause they are so popular.

dunstonh

then there is no reason you vantage go direct, check the comparison websites.

Although the comparison websites get paid the commission that a whole of market mortgage adviser would get.

bigadaj

dunstonh wrote: »

Although the comparison websites get paid the commission that a whole of market mortgage adviser would get.

But you don't have to apply through them,
Or the finance sections of the broadsheets etc

dunstonh

bigadaj wrote: »

But you don't have to apply through them,
Or the finance sections of the broadsheets etc

In which case the lender keeps the commission for themselves. It is always there. You can only change the destination of it.

bigadaj

dunstonh wrote: »

In which case the lender keeps the commission for themselves. It is always there. You can only change the destination of it.

Ok, so what happens with the hsbc products. If you got to a broker and he recommends one, they won't pay the broker so the applicant will still have to stump up the broker fee won't they?

dunstonh

Ok, so what happens with the hsbc products. If you got to a broker and he recommends one, they won't pay the broker so the applicant will still have to stump up the broker fee won't they?

Yes. Only an independent would consider HSBC. There are also broker only deals. Sometimes they will be cheaper/better than the branch deals. Other times the branch deals will be better.

Whilst mortgage volume is low and willingness to lend is low, the banks have the capacity to handle more through branches. So, there some have cut off the commission deals to brokers or brought in dual pricing. When lending increases, it will typically be the broker deals that come out better.