Compliance fee

robc281274

A mortgage advisor is asking me to pay a £300 "Compliance fee" - is this right?

dunstonh

It may be their internal name for a fee. What is it for? Why do you think it may be wrong?

robc281274

dunstonh wrote: »

It may be their internal name for a fee. What is it for? Why do you think it may be wrong?

It's described on the illustration as a brokers fee but when I asked if its negotiable I was told "Our compliance fee is fixed per case and is independent of the loan size so as it’s fair for everyone whether they’re borrowing £50k or £500k"

kingstreet

Do you wish to use a broker which charges a fee? If you don't, you need to find one which doesn't.

If you do, is the £300 fee acceptable? Does the broker's service meet your needs and expectations? Is this for whole market, advice, recommendation and arrangement?

I can't see the description of the fee makes all that much difference, TBH. It's the service and remuneration system which you need to find which suits you best.

hamster2013

compliance fee might be what they refer to administrativly as maybe credit searches, money laundering checks and identification and verification of your customer file...etc

robc281274

I accept some advisors charge a fee up front and others don't, what I'm trying to find out is whether advisors have to pay a fee to a regulatory body such as the FSA (for some reason I've got it in my head that it's payable to a 3rd party but I might be mistaken). Yes - the advisor offers whole market advice, recommendation and arrangement.

kingstreet

We have to pay fees to the FSA, levies to FOS, mortgage sourcing software charges, professional indemnity premiums etc.

These don't add up to £300 a case.

The broker has the costs of his business to pay and he needs to feed himself and his family.

£300 is a bit above what we charge, but not a lot.

robc281274

Absolutely accept that he needs to earn a living, I've no problem there. I suppose what I ultimately want to find out is whether the £1425 fee he's being paid - £300 from me, £1125 from the lender - is low, high or about right (for whole market advice, recommendation and arrangement of a £225k loan).

kingstreet

Where I operate, a £249 fee on top of average commission of around £300 allows us to cover our costs and make a small profit.

If I worked in an area where the average commission was £1,000 I wouldn't have to charge, although I do accept the cost of operating there may be higher.

Broker fees are the broker's decision. If you don't want to pay a fee, you need to find someone who will operate on a fee-free basis. You need to ask more brokers in your area what they charge to give you a broader comparison. There's no point you asking on here, all we can tell you is how we operate in our respective areas.

ACG

It sounds like its their broker fee just called it a compliance fee to pass it off as though its not their fee - this makes it easier for some clients to accept paying a fee.

I pass my fee off as my companies fee, which it is but i do see some of it.

My fee is sometimes more, sometimes less than what you have charged - depends on the circumstances. The proc fee (the part the lender is paying, seems on the high side) but overall i dont think its overly high. Maybe on the higher side but within the boundaries i would say. But without knowing the circumstances its impossible to say. If you have adverse or unusual circumstances then i would say its about right if not maybe even on the low side if it is a difficult case.

kingstreet

I've just noticed, the commission is 0.5%.

A typical rate for a High Street lender is between 0.3% and 0.35%.

Can you tell us more about your case and the lender chosen for you?