Embrace Financial Services - advice fee

red_imps_2003

We are currently moving home have been consulting with a mortgage adviser from Embrace Financial Services. We had an initial discussion, which I know was a free service, weeks ago but did not commit then to any particular product. With the developer pressing us this week for evidence we are making progress we met the adviser again a couple of days ago. As the meeting was convened/squeezed in in a hurry we were shown a mock illustration as the proper one was not available from the proposed mortgage provider. I now have the full illustration but notice that we must pay a 'Broker Advice Fee'. To be honest, I should have picked this up from the outset.

We also met a while ago with an adviser from another broker that does not charge any fee. If they can replicate the product recommended by Embrace Financial Service we could, potentially, save ourselves a fair bit of money. It seems daft paying for the same product we can get cheaper elsewhere.

I guess I have two questions. Firstly, does anybody know at what point we become obligated to pay Embrace their fee? Putting it more directly, would we already be tied in to paying an advice fee since we have met their representative more than once now? Or does the fee only become applicable on processing our full mortgage application? I know the fee itself is paid before the mortgage starts. The second question is would we be morally corrupt bar stewards for going with another adviser to save money at this stage if it is possible to do so?

I could, of course, ask Embrace or the adviser directly but I don't want to spoil our relationship if we are going to have to proceed with them (which we will do if we are already tied into paying them their fee). Any thoughts/advice welcome. We have a week or so before we really need to put the full application in.

ACG

The broker firm should have told you at the initial meeting (if not earlier) what the fee would be. If they did not know what the fee would be at that stage they should still have made you aware there would be one and a ballpark figure.

In your illustration it should confirm when the fee is due.

If you had been made aware of the fee upfront and now decided to go elsewhere then I would say you are morally corrupt bar stewards, but the way you have described it, no I dont think you would be.

Just playing devils advocate, appreciate saving the amount of their fee seems like a no-brainer (why would you pay a fee if you dont have to?) BUT if it all hits the fan and needs someone to pick up your file and fix the issue, you will generally speaking find a fee charging broker has more time on their hands to do that. They can afford to limit the number of cases they take on, where as a fee free broker will need to take on more cases to earn a similar income as a fee charging broker. As you have said yourself, they booked an appointment in at short notice.

Just to be clear, I am not saying you should or should not use either broker or any broker. Personally I do not think a broker should be getting to the point of issuing an illustration without even mentioning a fee is charged, I mention it on the initial phone call/email and infact it is a regulatory requirement to mention it at the earliest opportunity. It should be disclosed in the initial terms of business (which you will hopefully have received) as a bare minimum.

haras_nosirrah

How much is the fee?

I haven't heard of embrace. Who is the other broker - is it another independent or is it someone like London and country?

I would say to consider the following.

Have they been good at responding to calls and emails
Do they seem confident in your case
Have they got a good reputation
How much is their fee and is it worth paying to have a good advisor
Is your mortgage in any way considered complicated (a broker with 20 cases on their desk will have more time for you than a broker with 120.

haras_nosirrah

Just saw embrace is the your move brokers.
I don't think they are whole of market but someone may be able to correct me.

[Deleted User]

haras_nosirrah wrote: »

Just saw embrace is the your move brokers.
I don't think they are whole of market but someone may be able to correct me.

The are part of First Complete mortgage Network. Otherwise known as PRIMIS.

They are probably as whole of market as the rest of us with having some lenders others dont and missing some others. Id guess if its with Embrace they would be either estate agency based or based on the new build site?

haras_nosirrah

I am ex countrywide. Thought they may be similar with lender panel

[Deleted User]

haras_nosirrah wrote: »

I am ex countrywide. Thought they may be similar with lender panel

me too! :-) But by the time I escaped, countrywide didnt really care if we used the 15 on the panel of the other 40 behind the scenes so it was effectively as big as any of the 'standard' mortgage networks.

PRIMIS are also a network for many independant one man band brokers so id assume they are offering something beyond a very small panel.

as far as i know, Sequence are the main one that has a rubbish proposition and cant go off panel for anything

SonOf

I guess I have two questions. Firstly, does anybody know at what point we become obligated to pay Embrace their fee?

Once you sign the fee agreement (although there is a cooling-off period providing you have not proceeded with the mortgage there and then).

The fee should be disclosed and agreed prior to you being committed to it.

Some brokers will not have a fee agreement signed and that is potentially an issue for them as they will have nothing with your signature on saying you committed to the terms until the mortgage application is made.

red_imps_2003

Thank you all for your thoughts and responses. We went with Embrace initially partly because we were referred there by the estate agent and partly because we have used him before. In fact he arranged our current product as recently as last year so really I have no excuse for not being mindful of the fee. It may well have been raised in previous conversations; I really couldn't say. My issue is not so much whether they told me (they probably did and it was certainly mentioned in the mock illustration during our discussion this week). It is more at what point we become tied into paying it. Is it only when he submits our application to the mortgage provider or is it the moment we have a second meeting with the advisor beyond the initial consultation, given that he has provided 'advice and guidance' already.

To be honest, I will feel bad whichever one we choose, as both have invested time and effort into understanding our particular circumstances and researching the most appropriate product. All I am left wondering at ths point is whether I am free to choose which one submits the application for us or whether I am going to have to pay the Advice Fee to Embrace now regardless of whether we proceed to apply through them or not. I suspect the only way is to come clean and ask but I'm fundamentally a bit of a coward and was hoping for a bit of a steer of other people's experience first.

All I can do is approach the Embrace one, let him know the same deal is on offer from a fee-free broker and ask if it is possible to bail out at this point without having to pay the fee.

[Deleted User]

red_imps_2003 wrote: »

Thank you all for your thoughts and responses. We went with Embrace initially partly because we were referred there by the estate agent and partly because we have used him before. In fact he arranged our current product as recently as last year so really I have no excuse for not being mindful of the fee. It may well have been raised in previous conversations; I really couldn't say. My issue is not so much whether they told me (they probably did and it was certainly mentioned in the mock illustration during our discussion this week). It is more at what point we become tied into paying it. Is it only when he submits our application to the mortgage provider or is it the moment we have a second meeting with the advisor beyond the initial consultation, given that he has provided 'advice and guidance' already.

To be honest, I will feel bad whichever one we choose, as both have invested time and effort into understanding our particular circumstances and researching the most appropriate product. All I am left wondering at ths point is whether I am free to choose which one submits the application for us or whether I am going to have to pay the Advice Fee to Embrace now regardless of whether we proceed to apply through them or not. I suspect the only way is to come clean and ask but I'm fundamentally a bit of a coward and was hoping for a bit of a steer of other people's experience first.

All I can do is approach the Embrace one, let him know the same deal is on offer from a fee-free broker and ask if it is possible to bail out at this point without having to pay the fee.

Your fee will either be due on application, or on offer. Although I have seen one broker recently that charges for AIP but that is a) insane and b) very very rare. You will be able to back out without penalty if you wanted to

Worst case scenario you can ask your Embrace broker to reduce the fee to keep the business. Depending on the overall case size it might still make commercial sense for him to do this. If its a small case then he's unlikely to waive the fee in which case you move on having given him a chance to keep the business.
It never should have got to this stage without a clear knowledge of a fee being charged.

[Deleted User]

SonOf wrote: »

Once you sign the fee agreement (although there is a cooling-off period providing you have not proceeded with the mortgage there and then).

The fee should be disclosed and agreed prior to you being committed to it.

Some brokers will not have a fee agreement signed and that is potentially an issue for them as they will have nothing with your signature on saying you committed to the terms until the mortgage application is made.

My fee agreements have always only been generated and signed at the same time as the application is submitted.
I assumed everyone else did the same but maybe i'm wrong