Fee waiver if take life cover out-is this the right thing

tingly

Hello

I have just been to a mortgage broker who is independent.
Rather than pay a fee for the advice, circa £599 , they have offered to forego the fee, providing i take life cover out with them- which is fine as i need it to cover the mortgage
The only thing is that if i stopped the premiums any time in the next 4 years i will be charged the original £599.
Does this sound normal to you?
Thanks

amnblog

If you stop the insurance short term they won’t earn their full due from it to compensate them for the loss of the Broker fee.

Makes sense, but not an approach I like. Not a fan of subsidising one element of work with another.

ACG

Some brokers do it.
It is not something I do personally, but not abnormal.

tingly

Thanks for the replies. What are the best alternatives to this please? Do some brokers give the advice in a different/better way to this?
Also , is it true some brokers have access to “exclusive deals”
Thanks

ACG

I charge a fee for the advice and there is no reduction for taking out insurance. My thinking is that I get paid for the Mortgage job and I get paid for the insurance job.

If you cancel the insurance down the line, I will not be chasing you for payment. If you cancel it, you cancel it and I just pay the clawback.

Brokers do have exclusives and/or semi exclusives. It does not necessarily mean we will always be the best/cheapest.

tingly

Thanks acg. Just to clarify- you charge for the advice regardless of what i take out with you and then i just pay you either before or after the mortgage? Is that right? .... just out of interest, what if the mortgage didnt go through- would i just sort of chalk it up to experience then?
Thanks

ACG

I charge a fee on full Mortgage offer.
I would refund or transfer to a new application if the mortgage did not complete because the lender pulled their offer because of my mistake or theirs.