Mortgage advisor fees

AndrewSmith

jediknightwarrior wrote: »

Sorry, Andrew, I'm not trying to pick a "fight" or "broker bashing" but what you say is not true.

Solicitors, barristers, accounts, lawyers, surveyors are all fee earners and not paid by commission.

When was the last time you recommended First Direct, Direct Line etc? Unless you are purely fee based it is impossible to claim that a WOM adviser's recommendation is not influenced by commission.

IMHO, since the start of the year, the difference between nil commission products and ones that pay commission is currently too great to be ignored.

When was the last time a bank adviser offered a product for which he was not paid a bonus?

Nobody works for nothing. It is made clear in TOB that a fee free broker will research only those lenders who accept business from intermediaries. There are a handful that do not and as a result do not pay broers for intoduced business.

The point being made here is that the decision of one lender over another in the recommendation from a broker is not based on the level of commission he receives.

homer_j_3

With regards to solicitors - my father works closely with the court services as a probation officer and he will see people receiving legal aid and he tells me that its not uncommon for solicitors to state that they should argue things when they know they are doing so on a wing and a prayer. The client usually ends up with a worse sentencing and the solicitor can claim more from the legal aid system.

With regards to other professions, like plumbers and electricians etc. You do not get the opportunity to see the transparency of their work. I.E, I have seen one post on another section of this forum where one plumber would only install 1 make of boiler for certain reasons, if you were to engage with a trades person, you do not know the quality or source of their materials.

I was speaking to a floor layer and he told me that the 2 most important tools that he had for customers who were awkward or annoying - First tool was a bog roll and the second was a "b@$^@&* Tax" This made me realise how upfront we were and open to scrutiny.

All I am saying is that with Financial Services, you get a degree of transparency of what you are getting and what kickbacks are being received for the work done. Whilst the system is far from perfect and the debate on what benefit we actually provide continues, I believe that we are probably the most transparent profession out there considering that we are handling other peoples business.

There is an argument regarding commission bias and the FSA introduced the independent status where you charge a fee and refund all commission. I tried to get clients to work with me in this way and they would always answer the same, I would rather not pay a fee.

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Retired_I.F.A.

jediknightwarrior wrote: »

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Solicitors, barristers, accounts, lawyers, surveyors are all fee earners and not paid by commission.

Accountants and Solicitors can and do sell products that pay them a commission. Accountants Solicitors and Barristers can arrange a fee expressed as a percentage which is commission. Lawyers dont work in this country but most American ones fees are a percentage scale. Surveyors who do valuations for lenders usually get a percentage of the lenders survey fee.

Problem is commission is a dirty word in many British peoples eyes yet it is a fee and often a cheaper alternative than a fixed fee especially if it's for advice.

UK007BullDog

In two years time we will see super brokerages for IFA's and Mortgages and those who do both. There will be very low commissions and customers will have to pay for advice. They will probably also link up with accountants to beat the tax man. They will need lots of staff for support and compliance purposes to keep the FSA happy, to keep their professional insurance down and to protect themselves from customers who want to claim for a quick buck. The little brokers and one man bands will disappear or they will join umbrella companies.

This will mean that most of those will just go after the rich and the middle classes who have just started to wake up to financial planning their future.

It will leave the poor out and at the mercy of the banks for any kind of "advice".

unclebuck_2

empfun wrote: »

Hi all!

I am looking to buy my first property and have been to an estate agent where their independent mortgage consultant charges a fee of 1% of the value of the mortgage.

Is that reasonable? Also what are your experiences with the independent mortgage advisors as compared with banks? Thank you!

1% they are taking the **** you don't need to pay any broker a fee there are plenty out there they will be happy to give you advice and not charge you a thing as they get paid by the lender, there are also some that will split their commission. But don't take my word for it just google it.

jediknightwarrior

I stand corrected re solicitors etc...

I'm not trying to insult anybody Dan. I agree, 95% of brokers will not have a commission bias when recommending commission based products.

As a broker, if you can get the client to understand that it's sometimes better to pay a higher arrangement fee and get a lower rate then is it not possible to also get them to understand that by paying for fee based advice they may get a better deal?

The OP's adviser may have been going down this route.

I would prefer a WOM fee free system provided the rates are up there! However, I just wonder if there is starting to be a market shift away from brokers?

dunstonh

This will mean that most of those will just go after the rich and the middle classes who have just started to wake up to financial planning their future.

It will leave the poor out and at the mercy of the banks for any kind of "advice".

You have just summed up the RDR in a few lines.

Dan_Collins_2

The market has started to shift away from lending, let alone brokers! I was not saying you are inslulting me, we are just debating a subject, sorry!

I am starting to look at fee charging, but it has to be done is the right way, not just waking 1% fees left right and centre.

empfun

I think given my circumstances the estate agent's mortgage advisor would probably be worth the fee (although I under 1% fee is high) help by picking the lender with with the best chance of approval.

I've visited a bank already, and the advisor was all to eager to do a credit search on me.

JoJoArmani

i think you might be throwing money away - if you have "circumstances" i guess you could do with the saving?

all mortgage advisors should help you choose the best mortgage for your needs/ circumstances. they will have all dealt with various "circumstances" in the past and will have a good idea where best to look for your mortgage.

best of luck...