Fee, No Fee, WOM, Nearly WOM?????

Perspective

I thought I would open up this old nutshell again as it gives advisors/brokers a chance to help Joe Public understand how we work by comparing our views openly.

Lets start with Martins two main MSE premises surrounding mortgage advice:

#1;

"Are you whole of market?"

and

"Do you charge a fee"?

If the answers are yes and no then... whey hey hey... we're off to a good start. If the answer is anything else I would seek another broker.

#2; ....Why not get advice from a few brokers and then go directly to the lender....

The first statement in #1, holds true with whomever you seek to do business with, although the only caveat I would add is, “are you truly whole of market or FSA whole of market? In other words do you deal with everyone or a panel representative of the market”?

Obviously on the face of it true WOM gives the client access to all lenders but it doesn’t take into account the benefits an extensive panel (not 20 lenders) can give, i.e.: exclusive products, enhanced relationships which have many benefits including fast offer times etc.

The second part of #1, "do you charge a fee"? My experience within the market place is thus. If you pay to acquire your new clients be that through lead generation campaigns, advertising, etc and want to offer your client every mortgage on the marketplace you have to have the option to charge a fee. After all if you don't and the best deal for your client pays no procuration fee you won’t be in business very long recommending products where you earn nothing.

The question is what is a fair fee? This will do the rounds! The total fee charged (including any procuration received) has to cover your costs, earn you enough money to live and enough to reinvest in your business. After all if you loose money continually you will not be doing your client any favours if you are not around to give advice when their deal expires. TCF! The FSA states that you should advise your clients when their deal is about to expire, if you are no longer in business then you are not looking after your clients needs!

Those clients that do not wish to pay a fee have can seek out those advisors that do not charge, however you will see through these and other forums that most of these companies do not offer a face to face solution in the comfort of the clients own home which is fair enough as their overheads are lower. It’s simple economics.

What I suggest the distinction should be is:

"Full Service or Self Service"

Not

"Fee or No Fee".

Full service being an advisor or firm that visits the client at least twice in their own home, provides the research, advice, arrangement and full case management including liaising with the solicitors etc. Self Service being a telephone based advice service with an application made to the lender on the client’s behalf, a substantial difference. If our clients understood the difference between the two it would make life a little easier.

What I really object to is the general undertone in most forums that those advisors who charge a fee are an underclass. They are certainly pilloried for doing so and often do not speak out, especially here where Martin has stated “don’t pay a fee”.

#2; This is downright theft! If, after agreeing to the terms and conditions an advisor offers you (as detailed in their IDD) you invite him/her to research the market place with the sole intention to take their advice and go direct to the lender it is simple theft. Theft of their time….(theft is the illegal taking of another person's property without that person's freely-given consent)….If this was the original intent (as Martin suggests) I can only see it as theft of the advisors time and resources, time that the advisor could have spent with someone else!

I think this action is deplorable, we already have a shortfall of good quality mortgage advisors in the country, this encouragement of not thinking will only make matters worse by driving out those great advisors that remain in the business.

I’m not seeking to inflame opinions just help the public understand both sides of the fence, I don’t need to ask for your comments as I am sure it will elicit plenty, Simon
:beer:

I am a Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

homer_j_3

Whole of Market V Independent is the argument that has been discussed at length.

If you need to charge a fee and keep commission then you are offering poor value to the client to be fair as that same client CAN get an EQUAL service and level of advice for just a fee with a commission rebate or for free. As this site is about money saving - why would someone pay hundreds or thousands of £'s when it can be achieved for free.

Not one fee based advisor on here can convincingly give me an answer why there service or advice is better.

I class fee based advisers as those who charge a fee and keep the commission provided by the lender.

Quoting TCF in the manner you have is weak as you can as easily go out of business being fee based as you can fee free.

Being independent is probably the best way of operating for the client if you need to charge a minimum fee to maintain the running of your business.

I don't believe that all fee based advisers get grief on here - only those that spout rubbish about how superior they are and how the fee free advisers are doing a dis-service to themselves.

This board is for the consumer and is for moneysaving. Why would it encourage the consumer to go and pay money for something it can obtain for free?

Dan_Collins_2

Why are you starting this one again! It ends in tears or never ends! LOL

I belive that the fee thing is personal choice. If you charge a fee (reasonable fee not £1000's) and you do a good job then fine, if not then as long as you still do a good job then fine.

Some clients want a hand holding service, some do not, u have to make that judgment and hope that you dont step on their toes or ignore them.

We cannot be a true WOM until every lender starts to deal with brokers, look at HSBC, Britannia etc.

Also we only contact clients about existing deals if we have express consent!

I hope and like to think that I do my job as best I can and leave everybody else to worry about charging fees or not. Brokers that charge fees can go for the commission just like the broker does not!!

:beer:

homer_j_3

are you asking why I have responded or why the OP has posted this?

I responded because I am free to do so and I have said before that everyone has the right to charge or not charge. It is just the reasoning behind charging that gets me.

If they said "I have to charge a fee because my business would not profit without a fee (expensive premises, buying leads and marketing costs etc)."
I would not bat an eyelid at that. If they have clients prepared to pay for it then thats their business.

When the excuse given for charging a fee is because doing it for commission only means you have to give poor service and advice to make ends meet - it gets tiring.

I would rather that this topic not had been started as it has been argued over many times and the end result is the same.

The system is wrong - everybody has the right to operate how they want to in terms of fee charging.

Martin believes that fee free is the moneysaving way of receiving advice - if anybody doesn't agree with that and they feel that strong about it, well thats their choice but I don't think Martin will change his article.

Dan_Collins_2

homer_j wrote: »

are you asking why I have responded or why the OP has posted this?

I responded because I am free to do so and I have said before that everyone has the right to charge or not charge. It is just the reasoning behind charging that gets me.

If they said "I have to charge a fee because my business would not profit without a fee (expensive premises, buying leads and marketing costs etc)."
I would not bat an eyelid at that. If they have clients prepared to pay for it then thats their business.

When the excuse given for charging a fee is because doing it for commission only means you have to give poor service and advice to make ends meet - it gets tiring.

I would rather that this topic not had been started as it has been argued over many times and the end result is the same.

The system is wrong - everybody has the right to operate how they want to in terms of fee charging.

Martin believes that fee free is the moneysaving way of receiving advice - if anybody doesn't agree with that and they feel that strong about it, well thats their choice but I don't think Martin will change his article.

I was responding to the OP not your post. I agree its personal choice, your business not mine nor Martin's!