Fee Free Brokers to be a thing of the past?

Tiddler_2

UK007BullDog wrote: »

Yes Tiddler, read the sticky and get your signature sorted. Just a friendly heads up, OK!

I appreciate your comments and am not trying to upset anyone on here, but I read the sticky on the Code of Practice as saying I can add the signature if I want, rather than it being a necessity.

I did try to add it but got a message saying that my signature was too many lines, but to be honest I'm not here to try and get business, and whilst I have alot of experience in the mortgage world (over 20 years) I don't think that having a signature makes my opinions any more or less valid than other people, who provide advice/assistance to other people.

Dan_Collins_2

The sig is a load of pants and means nothing. I could be a cleaner and nobody would be the wiser! No smart comments you lot!!

This thing about selling insurances when you are a fee free broker really bugs me. It seems an excuse for the fee charges to use! Should the subject of protection be covered?? Even fee chargers try to sell if they are of that ilk! I have to say that me and all the people I work with give advice on protection.

We offer a seperate meeting to cover it and they take it or not no pressure, I think the allied crowbar days are gone, almost! Also we only talk about products we feel fit the clients needs and not just wack a big life and cic policy in front of them!

Also to the fee chargers! How do you apply to HSBC and other lenders who do pay commission? Do you have to get a letter from the client giving you auth to deal the app??

Abbey, Halifax and Woolwich have told us direct means direct and you cant use a broker to get the direct deals! I had a client who wanted to pay me the £500 I lost to place the mortgage direct with Abbey, they said no way!

Tiddler_2

Surely under TCF you have to discuss insurances with all your customers, to fully protect the mortgage, otherwise you are leaving yourselves open to a complaint.

A colleague of mine recently had a customer phone up to say he had been made redundant and knew he would have taken out ASU, but he had called the lender and they didn't have any record of it being taken out with them. My colleague checked the records and said yes you took it out with us, however you cancelled it directly with the insurer.

Without that he could have had a potential complaint, and compensation to pay.

We don't pressurise customers to take out insurance - what is the point, if a customer takes a policy they don't recognise the need for, they will cancel it, which leads to a clawback of commission!!

Dan, I don't know if you are criticising anyone who charges a fee, or just the independents who take a fee and rebate the commission. Like you say the facts are that you can't deal with the likes of HSBC etc as you cannot get a KFI before submitting the application. I have also read that HSBC insist on interviewing their applicants (not sure if its face to face though, as they could be very busy over the next 3 weeks if that is the case) I presume that this is in order to sell them their own insurances.

If you are criticising fee chargers generally, then you may or may not be surprised to know that during a recent FSA visit, they told us that they think that we should charge a fee for the service we provide, as it is a professional service. I have worked at both extremes, working for a fee free broker, working for a well known daytime tv advertising finance broker, where a %age was charged up to a maximum of £7500, wasn't comfortable with this so left. Now charge a flat fee of £199 on completion and most people accept this.

Dan_Collins_2

Hi Tiddler

Was not criticising anybody other than ppl that go on about non fee chargers pushing insurances. I actually agree with the theory behind the fee charger, just we dont charge and keep commission.

I am going to keep this under review as things will be changing in our world!

Tiddler_2

Definitely!!

As I said I was always of the anti-fee brigade when I first left the Halifax to move into brokering, and could never understand why anyone would pay the fee.

What I currently find hard to accept is the %age fees charged. Why should a customer pay more, just because they are borrowing more? In the majority of cases (I accept there are exceptions) it takes the same length of time to source a deal whether they are borrowing £40k or if they are borrowing £400k.

Some would argue that the fee should be higher on the lower mortgage as the commission earnings are miserly, for the same amount of work.

Dan_Collins_2

Yep agreed. It sounds greedy, but we are finding the smaller mortgage more and harder work, so we are thinking about a £250 fee for mortgages under say 100k or 80k. Could be rebated but they seem to be the time wasting cases that go wrong?!?!

payless

Tiddler -
yes the use of signature is optional, but

Mortgage Advisers who choose not to use the signature should not indicate they are brokers in any other way within their posts.

Dan, yes I agree the signature is not perfect - I would have preferred an FSA reference number to be included , but the hassle around signature/ no signature was very long winded, so thats whats was settled on my Martin - I don't agree with everything he says (esp in his mortgage article) but its his site.

payless

Tiddler fees ( if charged) don't have to be written in stone- you can adapt for each case - I agree that large cases are worth more per hour than small cases- hence thats why I usually rebate a little - even if someone wants a commission based service rather than totallt fee based( full rebate)

Dan_Collins_2

payless wrote: »

Tiddler -
yes the use of signature is optional, but


Dan, yes I agree the signature is not perfect - I would have preferred an FSA reference number to be included , but the hassle around signature/ no signature was very long winded, so thats whats was settled on my Martin - I don't agree with everything he says (esp in his mortgage article) but its his site.

Payless have you been drinking?

All it needs is I am a broker, IFA or whatever!

Why would you put your FSA number on it. Next thing you know we will be giving IDD's out before replying to a thread. This is a public forum for opinions and very, I stress VERY general advice.

dunstonh

Putting FSA number on is just asking for trouble. We would then have to go totally compliant in everything we write. Plus you can then be acused of showing your company details which some may interpret as advertising. You also have the idiots out there that would take pleasure in complaining to the FSA about your posts made.

My sig is only in place as it was a recommendation from my compliance dept just in case (along with a warning from them that its fine having discussions but avoid recommending anything and keep it generic). I would go further than Dan and say its not very general advice. It is pure discussion only and opinion. NO advice.