Sloppy Service from London & Country

MortgageMamma

I've worked on a fee free basis and on a fee charging structure, just to monitor the difference.

here's how it worked out for me.

When I worked on fee's free I got lots of enquiries, lots of referrals. lots of cases of wine chocs and flowers from my clients. I never pushed insurance but I advised and sold on plenty, and I have a 100% persistency rate with the policies I have sold over 3 years. Business was abundant and although I worked hard, I have never EVER once had a complaint from a client about lack of service, quite the opposite.

I then got introductions from a local company, mainly adverse and began charging a fee of about £500 per case. even the prime cases. My referrals began to slow down, my clients didnt seem to rate me so highly, I was still earning plenty and writing decent amounts of business, but I had to speak to more clients than I needed to originally because some just wouldnt pay the fee's when they knew they could get it free elsewhere. I had to start advertising. I felt guilty about the clients I'd charged a fee, especially the adverse clients, and I now believe it was wrong of me to do that.

The fee's free model worked the best for me, and thats the model I intend to continue with, for as long as the lenders pay commission to us. Commission has never once entered my mind when placing a case with a specific lender, suitability, service, and the clients best interests are all that count to me. And I am no exception. I know LOADS of mortgage brokers, right across the UK, and with the exception of one who used to post on this site, every single broker or IFA I know acts purely in the interest of his clients. We cannot afford not to these days in the lititius society we live in!

LiamM_2

Well, I've now registered a query with Endsleigh - so we'll see what they say.

There is another property that I've been interested in before now - but it's been on the market for a while and has recently been reduced to £120k. It's a little cottage with a garden that is not adjacent to the property (i.e. it's next to the garden in front of the property). So I'm wondering if it's a wise move investment-wise or whether or not I'll have the same problems when it comes to me selling it.

Thanks for all the replies from the advisors! I guess what I needed was a bit of 'personal service' and handholding to an extent (first time buyer). My conclusion, therefore, is that L&C are only worth any time if you know exactly what you want and how you want it!

dunstonh

Virtually everything I do now is on a customer agreed remuneration basis. Fee agreed and commission offsets it. If shortfall, fee is due. If surplus, rebate is paid or terms of contract improved.

Of course it is easier to do that with investment class business than mortgages but I know someone that is trialling it with mortgages and although they have lost a few mortgages out of it, they say they have earned more and its better quality as they can present lenders that dont pay a commission and show the cost of using them against one that does. i.e. Use Britannia and they pay no commission so you will be liable for my fee. However, use the next best option of xyz who will cover my fee in full and give you a small rebate. Compare the cost over the tie in and they get to choose.

That said, he is a Norfolk old boy with 25 years of dealing with the same people so they would do anything he says.

Round here we still get clients giving us runner beans, tomatoes or a cake they baked when we call on them. Not sure if you can offset those against the fees though

payless

Dunstonh its the way I generally work also

Mr_helpful

If a broker works efficiently and has low overheads there is no need to charge a fee. A large proportion of some brokers expenditure is on advertising which can be very expensive eg I often wonder what Ocean finances budget is with all the tv ads but it would explain their 2% arrangemnt fees on mortgages.
If you keep having to look for new business then your costs are higher and you need to charge a fee.
If like me, your advertising costs are less than £50 per year (cost of hosting website) and by looking after people, your existing clients recommend the majority of clients to you, then it is possible to give a lot of attention to each client and make a decent living, without ripping them off with fees.
Obviously Dunston being an IFA will work differently from this and I think fee based can be more appropriate for investment business.

Conrad

Quote from the outgoing Chief Executive of the FSA, John Tiner;

"the term Independant Financial Adviser' should only be used by those who select from the whole of market and are REMUNERATED BY A FEE"

"the practical effect of the incentive structures (commission) in the supply chain has all too often been to operate against the interests of the customer".

Again: Would we prefer a Doctor was entierly remunerated based upon commissions for selling certain drugs?


Mortgage Mamma - I had already said to myself some time ago "I bet she will be one of those happy clappys that pretend she has not had a single life policy lapse".
I nearly choked when sure enough you stepped up to the plate "100% persistency rate".......... you could'nt make it up.

How can you say this? Ive been in FS 20 years, from adviser to regional director and NEVER EVER come accross anyone with 100% persistency!. Counrtywide were the largest broker when I was there and I used to get the persistency stats of thousands of individuals. No one came even close to 100%.

Thats why I call you a happy - clappy. Total inability to face facts. No doubt your 'booming' with business right now, yes.

Honestly, I knew a broker from Essex / E London border who said this and added she had neber had a single mortgage declined. Recently she went bust, classic.

payless

That statement related to fee only, ie when the commission was rebated to the client ( maybe to offset the fee!) or used to enhance the product ... and I do think it is the fairest way... and the fee can be less than the commission rebated . I try and work in this way, although often make it more user friendly, as I feel the market is not really fully ready for " true fee based" ..
ie. If a lender is paying more than usual or more than I feel is justified for work for that client I will rebate.


HOWEVER the quote is getting mis used here , as I believe the debate is really about those that charge a fee ON TOP of the commission.

homer_j_3

Would we prefer a Doctor was entierly remunerated based upon commissions for selling certain drugs?

I would prefer my doctor to have access to every drug in the market place and not charge me for it. I would therefore expect that the drug prescribed was the best for my diagnosis. I would not expect to have to pay a DR any money what so ever to ensure that I get the right medication.

If the doctor couldn't afford the medication off what he is paid through my taxes then I would expect him to give me a choice to pay to receive that.

Mr_helpful

Conrad wrote: »

"the term Independant Financial Adviser' should only be used by those who select from the whole of market and are REMUNERATED BY A FEE"

I think this is a shining example of what the industry has working with in it. Would you want to take advice from someone who claims to have years of experience and yet cant even spell the first word in IFA

Mortgageman

Hi Liam,

Firstly, sorry it has taken me a while to respond to your post - I wanted to have a bit of an investigate here to see what had happened.

Secondly, as you have posted on a public board, I have assumed you will be OK with me responding here too - I'll be careful not to divulge any private information, but if at any time you want me to remove this post then just send me a private message (over there on the left hand side).

We first spoke to you around 9:00 on 24th September - you had a chat with our adviser, who took down details of your salary, car loan etc. and confirmed that you didn't yet have an offer accepted. Our adviser also explained that the rates he would quote were only indicative, as any products we talked about were liable to change.

You had a chat with our adviser about how much you could borrow, and discussed lenders criteria - and our adviser mentioned that at times Abbey would consider up to 6x income, Accord up to 5x, and other lenders different amounts depending on affordability calculations. You talked about properties that you had seen in the £125,000 to £150,000 price range, and we confirmed that, given your details this should be doable.

Our adviser then gave you costs for mortgages at £177,000 (making it clear that this was "top whack"), £150,000 and £125,000. You were originally most interested in the £125,000 end of this scale, and we made it clear that, were you looking for £150,000 or more then Abbey was probably the only lender who could help.

You asked how to proceed, and we said it was a case of finding a property and calling us with the details. This call took about 19 minutes.

We next spoke to you on October the 8th, where our adviser told you he had been working on your case all morning (having received an earlier email) and that Abbey, depending on your credit score, would lend between £128,000 (low credit score) and £150,000 (high credit score) - which fell a bit short of the amount you wanted (£156,000), but was with in line with your original requirements (between £125,000 and £150,000).

Unfortunately, the current market conditions have played a part here too as in recent weeks the fall out from the well publicised credit crunch has begun to bite. Scenarios that looked very possible a few weeks ago are not looking so great now as lenders tighten up on their criteria.

I guess what I'm trying to say is that the situation has changed so much since our initial conversation - both your individual details (an increasing in borrowing) and the overriding market condition (a tightening on credit) that when we had all the details we needed to give advice it turned out we couldn't reach your borrowing requirement. I appreciate that this is a bit disappointing, but you can see from some of the responses to this thread that, given your income level, you're really looking to borrow at the very limit, and possibly even a little past it.

I appreciate that we gave you an indicative borrowing amount, but we tried to be clear that this was only indicative and until we had all of the details that's all it could ever be.

Moving foreword, I've sent your case to the relevant supervisor to have a chat with the adviser, because there are some things I think he could've dealt with better . I am really sorry that you weren't 100% pleased with our service, I hope that the above shows that you were just a victim of circumstances.

If I can do anything else to help then please don't hesitate to contact me (again, use the private message service of this forum).

best regards


MortgageMan