Take extra care when using brokers at moment

AndyH1976

I need to remortgage and have contacted my usual FA. He has found me an Offset Tracker with the Woolwich but the rates are higher than advertised on their website.

I appreciate that this might be due to my self cert status but I have a question.

Can an FA work with the lender to agree a higher fee and get more comission from the deal?

Im looking to borrow £320K so I need to make sure Im getting the best possible deal.

homer_j_3

Andy,

A new post may have been better for this but in short the answer is no, your FA cannot agree a higher rate to increase commission. Your FA will have a number of deals available to them and they will choose the best one.

I wasn't aware that the woolwich used self cert deals but haven't used them in a long time to be fair. Are you sure its not fast track service?

superged

No this is an example of what this whole thread is about! The lenders are offering better rates direct to the public than they are to brokers. Your adviser, I can absolutely 100% guarantee will know this but is not telling you.

Ian_Griffiths_Halifax

Homer J. I totally agree that the FSA made a big mistake when they created the Whole of Market or Independent option.

If an adviser states that he is Independent in his advertising, then he must also state that the client has an option of being charged a fee (and an estimate of the likely cost should be stated) OR that the adviser can be paid by the lender, not both as many do.

Some Estate Agents have touted them selves as Whole of Market when they COULD use more lender, but still not all, and yet still only recommended from around 5 lenders!

I also heard a couple of years back, that one Estate Agent chain was targeted to pass 85% of it's mortgages to HBOS group companies. How can that be TCF?

homer_j_3

I know that countrywide estate agents at the time I worked in the EA game had access to about 15 lenders yet they were telling people that they were WOM.

I know that it was not uncommon in the larger chains of EA's to have priority lenders and there was a nice big story in the paper about this time last year when a disgruntled ex employee became whistleblower about RBS being a lender that this EA actively encouraged to be used.

Its the same old story - large firms have sales forces and the FSA have tried to get firms to stop this mentality of sales by looking at the way incentives are made. As with most things the FSA does, when it solves one problem and creates another.

My wife is doing her diploma in compliance and she has been looking at the differences in regulatory bodies and one classic line that made me laugh was that the FSA seem to be reactive rather than proactive. They wait for the problem to get big enough before they do anything about it.

Ian_Griffiths_Halifax

homer_j wrote: »

As with most things the FSA does, when it solves one problem and creates another.

My wife is doing her diploma in compliance and she has been looking at the differences in regulatory bodies and one classic line that made me laugh was that the FSA seem to be reactive rather than proactive. They wait for the problem to get big enough before they do anything about it.

That is sooooo true.

Ian_Griffiths_Halifax

AndyH1976 wrote: »

I need to remortgage and have contacted my usual FA. He has found me an Offset Tracker with the Woolwich but the rates are higher than advertised on their website.

I appreciate that this might be due to my self cert status but I have a question.

Can an FA work with the lender to agree a higher fee and get more comission from the deal?

Im looking to borrow £320K so I need to make sure Im getting the best possible deal.

Hands up all those advisers who think this case would go through if the client went direct?

dunstonh

I know that countrywide estate agents at the time I worked in the EA game had access to about 15 lenders yet they were telling people that they were WOM.

The FSA really doesnt help the situation does it. On the investment side we have tied, multi-tied and independent/whole of market. On the mortgage side it's vague and unclear.

The RDR is hitting investments further by saying that any tied or multi-tied "adviser" will have to drop the "adviser" from their title and stop making any reference to advice and make it clear they are not advisers but sales people. Only IFAs will be able to use adviser. That is totally common sense. However, back in mortgage land the FSA say that they dont want to alter mortgage adviser classifications at this time and RDR will not initially apply to mortgage advisers although it may follow later.

On the investment side it is the salespeople that damaged the reputation of advisers with the salesforces overwhelmingly accounting for the majority of complaints to the FOS. FSA has finally seen the light and is dealing with it.

On the mortgage side, it is the salespeople there that have created the damage that mortgage brokers are now seeing and what an opportunity it would be for the FSA to split mortgage brokers as either sales people or advisers.

of course, that would be a pro-active change which is positive to the real advisers and the consumer. Not something the FSA has a very good record on.

petermb_2

Dont be too hard on the FSA guys. They have covered your backs big time in a number of areas without you even realising it. Having said that I think the FSA is there to maintain status quo.

You can imagine that I am pretty cynical about the whole Financial Services Industry now having come from an adviser background to finding out what the true facts are. Very scary stuff.

If you guys want to know about this I will gladly discuss in private.

Dan_Collins_2

Ian I think you miss the point. The client does not have to go direct but for .50% a client would have to be pretty thick not to go for it.