In house mortgage advisors

kingstreet

This is a question of perception IMHO.

Should a firm which is only offering commission paying deals to a potential client continue to describe itself as offering independent advice if the client does not accept the independent fee paying only option?

I use the expressions "independent" and "whole market for commission paying deals" to describe the difference between the services I offer at the stage of presenting the IDD.

The system adopted by the FSA leaves scope for the two to be confused, to the detriment of the consumer, in my view.

Let_Us_See

IMHO I don't think the FSA could make it clearer?

"A firm wishing to hold itself out as independent will need to give a customer a purely fee-based option for paying its fees. However, the firm may in addition provide the customer with other options, such as fees and commission."


To be independent you must offer the client the option of paying a fee for your renumeration. If they decline to pay a fee, you can receive commission and/or charge a fee, and you are still independent. Therefore, how you are renumerated does not affect your independence status, but you must offer the client the option of paying by fee. If you don't offer this option then you cannot claim to be independent.

Conrad

OP - youv'e been spun the oldest line in the book!

I assure you no corporate vendor would ever demand such a thing. This is a sales tactic. Tell him you'll happily let him arrange your mortgage with Post Office Direct and when he raises eyebrows say "we'll you did say you wanted the job".


Tell you what, play him. Arrange a big fat life assurance policy with him once you've explained your'e using Post Office Direct (or whoever). Keep him sweet. After completion cancel it.

dunstonh

IMHO I don't think the FSA could make it clearer?

"A firm wishing to hold itself out as independent will need to give a customer a purely fee-based option for paying its fees. However, the firm may in addition provide the customer with other options, such as fees and commission."

Yes. A firm can hold itself as independent if it had a purely fee-based option. However, the firm can still revert to other options if they do not get employed on independent basis.

kingstreet

LUS - I'm not arguing with what MCOB says, but I can't believe it was the FSA's intention to leave the consumer in a situation where it turns down the independent option but still thinks (or is not dissuaded from thinking) independent advice is being given. Hence my qualification of what a client is actually getting if the independent, fee-paying option is rejected.

There have been numerous threads on here where members thought they were receiving independent advice, but who paid no fee and received only "whole market for commission paying products" in their recommendation.

dunstonh

LUS - I'm not arguing with what MCOB says, but I can't believe it was the FSA's intention to leave the consumer in a situation where it turns down the independent option but still thinks (or is not dissuaded from thinking) independent advice is being given. Hence my qualification of what a client is actually getting if the independent, fee-paying option is rejected.

That is exactly how it is presented to us. If the client turns down the independent option then the process and documentation should not be presented as independent as it is not. It is whole of market. Offering independent but it not being selected does not mean any "lesser" option becomes independent. It is interpretation (as is so much the case with FSA guidelines) but a logical one to make.

Let_Us_See

Is it any wonder that clients seeking advise are confused? I will try to confirm what "independent" means in simple terms.

1. To be independent you must offer a client the option of paying a fee for advise. No more, no less. Whole of market etc. doesn't enter into it.
2. If the client declines to pay a fee, and accepts the adviser will be paid commission (procuration fee) by the lender and/or charge a fee, you are still independent.
3. If you do not offer the client the option of paying a fee you cannot be independent.
4. Independent does not refer to advise given. The mortgage advise provided if the client agrees to pay a fee, or declines to pay a fee and accepts you will be paid commission (procuration fee) by the lender and/or charge a fee, is exactly the same advise. Do not confuse advise and independence.
5. Claiming independent advise can only be received if the client elects to pay a fee, and anything else reverts to "Whole of Market" is nonsense. You can work from a panel of lenders and still be independent.
6. Independent status has nothing whatsoever to do with "advise" it refers only to the option of allowing a client to pay a fee.

Now going to have a lie down in a dark room.

sugarlily

Oh dear, explosion in the worm can...

:rotfl:


well... I wasn't sure what to do so I went with his mortgage... we'll see what happens.