What do you expect from a mortgage broker?

MortgageMamma

No that would have to be EWL

FRUGAL_4

MM,

I read your thread with interest, as a consumer I would like my IFA to check the whole of market with commission paying lenders and non commission paying lenders and then give me the choice of 2/3 mortgage lenders to choose from. I would happily pay a fee if I didn't choose the commission paid lender. The downside to this is of course the IFA could lose out if the client went elsewhere once you had found a selection of mortgages meeting their specific requirements, I would be happy to sign stating that I would pay a fee to you in this case.

This is in my opinion of course, but I find threads mainly with Financial advisors posting rather scary, the general consumer including myself knows very little about mortgages etc, at the end of the day most people need a mortgage, you either use an IFA or get fleeced by a bank, joe public isn't interested in the jargon or the ins or outs, majority want good honest advice and the mortgage terms explained to them in simple english, and the IFA or the mortgage advisor at the bank to be available to take phone calls to answer queries, my previous IFA never answered his phone, constantly on answerphone and only replied after several days of waiting. Good service goes along way, I have since changed IFA and moved most of my policies I had through him, his loss not mine. (didn't move the CI, as mine is 8 years old and I was told by my current IFA not to move it as the cover is far better then than today, I appreciated that honest advice).

FRUGAL

MortgageMamma

Thanks for your comments frugal much appreciated - your old IFA sounds a nightmare, I'd hate to think how much business i would lose not returning calls for a whole week - scary!

silvercar

From a consumer viewpoint (and trying to think of how it would work from a broker's side),

If your USP was that you guarantee to search fee-free all deals (broker only, direct only and everything in between), this should increase your popularity and hence generate more business. By doing this you would sometimes (1 in 20??) be providing a mortgage on which you gained no commission. Rather than think of this case in isolation as a "loser", think of your business model as a whole - business increases by x% because of your USP, yet occasionally a particular client brings you no commission on that occasion. Hopefully that same client returns to you in the future when you may be able to gain commission. In the meantime your business is growing because your USP attracts more people.
(Similar to supermarkets having loss-leaders. Occasionally, someone's basket may be a loss but overall the business model still works.)

I'm clearly missing something, or you (brokers) would all do it, but enlighten me as to what.

MortgageMamma

The fact is that not all consumers are clear on the level of market access an adviser really has because

1, the Financial Services Authority cocked up the definitions with the Whole of Market but really panelled fiasco

2. There are some advisers out there who use this to their advantage to tell consumers they are searching the whole of market when really they are not, they are searching from a panel because of this

3. A whole of market broker only has to recommended products which he has access to (we could argue what access actually means) some brokers will say this is the lenders on their panel and some will say its those who pay commission

4. Because of this and the complicated structure of different businesses within the industry to consumer is totally confused and often does not have to knowledge to know the different between whole of market, panelled, single provider, whole of market including non commissoin paying and direct only deals etc etc.

This is why I started the thread. To raise awareness, to get public opinion and to highlight some common misconceptions. I also did it for my own purposes too, in that I am currently reviewing my own business model to ensure that I am fair and not misleading to my clients and that I give them the level of market access and service that they want. Call it market research on a slightly biased audience!

payless

silvercar wrote: »

From a consumer viewpoint (and trying to think of how it would work from a broker's side),

If your USP was that you guarantee to search fee-free all deals (broker only, direct only and everything in between), this should increase your popularity and hence generate more business. By doing this you would sometimes (1 in 20??) be providing a mortgage on which you gained no commission. Rather than think of this case in isolation as a "loser", think of your business model as a whole - business increases by x% because of your USP, yet occasionally a particular client brings you no commission on that occasion. Hopefully that same client returns to you in the future when you may be able to gain commission. In the meantime your business is growing because your USP attracts more people.
(Similar to supermarkets having loss-leaders. Occasionally, someone's basket may be a loss but overall the business model still works.)

I'm clearly missing something, or you (brokers) would all do it, but enlighten me as to what.

although if I ( as a consumer) was using someone with this USP ( and promoted it, rather than just those that do it as the circumstances demand - ) I would want some proof that it was actually done , and guess as would any compliance officer of a network / regulator ...

MM have you run it thro' your people who check your advertising ?

MortgageMamma

payless wrote: »

although if I ( as a consumer) was using someone with this USP ( and promoted it, rather than just those that do it as the circumstances demand - ) I would want some proof that it was actually done , and guess as would any compliance officer of a network / regulator ...

MM have you run it thro' your people who check your advertising ?

I have not advertised anything or made any conclusions are yet, I'm simply getting a feel for what people want, what other brokers do and then having a long hard think about my business model and where I can improve my service without running myself into the ground for nothing

payless

I know you have not advertised , just wondering if thinking about it is worth it if maybe your principal won't let you follow this route anyway

MortgageMamma

I dont see how it can be their decision? But you know me if there were any objections I would argue the point on best practice.

Time spent thinking about it now may not be wasted, if in time I am dissatisfied with my principal or I feel somewhat restricted I would just go DA and do exactly what I wanted, but for the time being this was the right option for me - I'm not experienced enough from a compliance prospective to go DA just yet and most other advisers I know are happy to be part of a network...I expect I also would have struggled with capital adequacy