Take extra care when using brokers at moment

payless

Usually brokers can source deals better than on High st, however for a number of reasons some of the best deals are currently avaiable only direct.

Some lenders only sell direct , others ( many of the big players) are currently offering lower rates / lower fees deals via branches than thro' brokers. For example 2 big players have trackers deals 0.5%pa cheaper if going direct than their comparable deal via brokers

If using comparison sites make sure they include direct deals as well.. not all do

HOWEVER a broker can help - To get the overall lowest cost ensure your broker is being totally open with you and discuss these deals ( Just saying He's " Whole of Market " is not enough if you want a true comparison from the REAL Whole of market ) .Therefore if you need help / reassurance with research then I would say at the moment you may it worthwhile sourcing a broker who will be open ( perhaps that means you might need to pay him a fee for his initial time ) who will go thro' the various direct deals and then give you the info to apply direct if thats the overall best option for you.


OK he won't make as much ( although less paperwork / chasing if only adving on research rather than processing ) . Of course if you are happy to pay for the broker deals to get his extra service / protection on processing thats fine.

payless

I'm ready to be shot down in flames... but of course those brokers on here aren't posting to attract business , so they won't be losing anything.. Those that know me know that I'm very straight and also have strong consumer protection feelings

Suppose its the big players inthe the broker market ( like thsoe that get mentioned here ) that will be hit hardest.... by me posting this here ( although all brokers are suffering the same issues with own clients)

Unfortunately the same goes for those who think they are being clever and using "cashback sites" ... the cashback is often small in comparison with the rate difference This is of course more for those Rate chasers than hard to place cases- where some brokers excel.

So I'm actually saying at the moment Martin's article is wrong ... fees free brokers aren't always going to consider these Direct lenders ... but more importantly most aren't going to admit that the deal they are offering via XYZ is actually cheaper if you approack XYZ direct, and neither will be cashback websites .

Of course just because a broker charges a fee does not mean he will include the extra research ... you must ensure he is offering FULL RESEARCH and prove it.

Hopefully this is just a temp issue in the current climate

Conrad

Well said Payless.

You know the more I think about it I can see a significant proportion of the broker market going out of business, what with lending having tightened so much and now direct only products.

Yesterday I called 2 packagers I deal with and asked them to put in writing that they as individuals accept liability for paying my procuration fees (the FSA expect us to ensure our own liquidity and margins are robust going forward, so this mover seeks to underpin my business sustainability).

Anyway the owners of both business's shocked me with thier candid responses which can be summarised thus;

We might not be here in 3 months, so I cant blame you, things are down to the wire.

I kid you not these are top guys that have been in finance most of thier working lives!

Ooops

payless

Conrad wrote: »

Well said Payless.

You know the more I think about it I can see a significant proportion of the broker market going out of business, what with lending having tightened so much and now direct only products.

Yesterday I called 2 packagers I deal with and asked them to put in writing that they as individuals accept liability for paying my procuration fees (the FSA expect us to ensure our own liquidity and margins are robust going forward, so this mover seeks to underpin my business sustainability).

Anyway the owners of both business's shocked me with thier candid responses which can be summarised thus;

We might not be here in 3 months, so I cant blame you, things are down to the wire.

I kid you not these are top guys that have been in finance most of thier working lives!

Ooops

Never really thought packagers added any extra benefit to my average client . Can't see they surviving.. I won't miss them .

It will be a tough few months as things are sorted, and possibly a very differnet position afterwards

I would actually prefer to have access to the direct deals - even if this meant no/ lower commission- at the moment they are being kept exclusive to direct routes partly to control business flow- not just revenues, because as we know its often cheaper to lend money via brokers

minimike2

Conrad wrote: »

Well said Payless.

You know the more I think about it I can see a significant proportion of the broker market going out of business, what with lending having tightened so much and now direct only products.

Yesterday I called 2 packagers I deal with and asked them to put in writing that they as individuals accept liability for paying my procuration fees (the FSA expect us to ensure our own liquidity and margins are robust going forward, so this mover seeks to underpin my business sustainability).

Anyway the owners of both business's shocked me with thier candid responses which can be summarised thus;

We might not be here in 3 months, so I cant blame you, things are down to the wire.

I kid you not these are top guys that have been in finance most of thier working lives!

Ooops

Would that be Optoma then?

dunstonh

Nothing wrong in what you have posted. Whilst this site does promote "free" wherever it can, it does make sense to see an adviser on fee basis a lot of the time. Especially where that fee could be offset against commission or you end up on a cheaper product.

A mortgage adviser isnt going to be expensive on fee basis and if they give advice on a cheaper deal you will probably find you save more than going to a "no fee" adviser.

Payless, I bet if you costed your fee and a no commission mortgage deal against the best commission deal, you would come in cheaper over the deal period.

I think its about time Martin revised his article promoting fees free advisers and highlighted that paying fees for advice can often be cheaper than not. It doesnt just apply to mortgages either. The pensions article has inaccurate data on it as well which suggests using an adviser is expensive. Yet its possible for an adviser to come in with lower charges than the execution only options available.

Fee is not a dirty word and it is nothing to fear. Its better to pay for good unbiased advice than not pay for potentially biased advice that could end up costing you more.

Ian_Griffiths_Halifax

I would LOVE to just see clients and advise them to go direct to the lender and charge them a small fee of say £100. The only problem there is that most people don't want to go direct as they aren't savvy enough/want somebody to do it for them/don't like filling in forms (internet or paper) etc etc.

Another problem is that these deals are not always the right one for the client. Just because the rate is good, it doesn't mean that it's right for them. If it is then fair enough.

£100 to be told to do it your self might sound like a lot of money, but when you take into account fuel to get to the clients house, travel time there and back when you could be seeing somebody else, the fact that we work outside of a 9-5 working day including weekends, we have to pay for sourcing systems, professional indemnity insurances etc, it all mounts up.

I can see that most brokers are going to move towards charging a fee for their time in much the same way as an Accountant or Solicitor.

jediknightwarrior

Couldn't agree more. This is what I've been trying to get at since the end of January.

As things stand currently, people should either do their own research or pay a fee.

As you've gathered I'm not a fan of L&C's approach which I believe is unfair.

http://www.sundaymirror.co.uk/news/yourmoney/2008/04/20/how-to-beat-the-credit-crunch-crisis-98487-20388456/

Will they recommend HSBC if you ring them for advice???

dunstonh

I would LOVE to just see clients and advise them to go direct to the lender and charge them a small fee of say £100. The only problem there is that most people don't want to go direct as they aren't savvy enough/want somebody to do it for them/don't like filling in forms (internet or paper) etc etc.

Give them the choice. Maybe £100 for the quick and dirty and £300 for the works with any commission rebated or offset should a commission deal be cheaper. In effect you use the commission rebate as a cashback which you can cost into the comparison with the non commission options.

£100 to be told to do it your self might sound like a lot of money, but when you take into account fuel to get to the clients house, travel time there and back when you could be seeing somebody else, the fact that we work outside of a 9-5 working day including weekends, we have to pay for sourcing systems, professional indemnity insurances etc, it all mounts up.

Tell them before they book the appt that the fee is £100 but you will be true whole of market on your research and that is execution only or £300 if they want the full advice basis.

If they agree the fee then its worth the visit, if they dont agree the fee then you have saved yourself time by not seeing a time waster.

jediknightwarrior

just thought I would add...

As brokers do not post here for personal gain anyway, should the site not ban weblinks when you click on usernames? This will remove any suspicion.

Conrad

You know I've spent a good part of the last few days trying to place an extreme case, a case that every packager and lender I tried said would not be possible. I have'nt been paid a penny yet and there is every chance she will change her mind and not go ahead.

Just managed to place it with a tiny private lender (solicitors actually) that only do about 3 loans per month. The risk to me is very high as the client cannot prove a sustainable income or even that she is self employed (no biz card, no invoices, nothing, she just cuts old ladies hair for cash - always has), however she is selling the property and this is just short term finance to help her buy the new one - her retirement home abroad. Many many other complications.

For that I charge £5500. I like these extreme cases as they pay very hansomly, but no doubt some would say my fee is extreme, but without me she will not fullfil her dream (she cant sell for 12 months - long story) and all other brokers had totaly cold shouldered her, so I think the fee is justified afterall I could well end up having to defend myself one day!