Some mortgage brokers dont know who their friends are

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  • MortgageMammaMortgageMamma Forumite
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    OMG, steal money from tesco using other peoples receipts?????? you've got to be kidding, surely NOBODY would stoop so low....please link the article MMD I'd quite like to cast a glance over that. Money saving is one thing but promoting theft from anyone, be it a large worldwide corporation or someone dropping a tenner on the street is absolutely morally reprehensible :eek:
    I am a Mortgage Adviser

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  • MarkyMarkDMarkyMarkD Forumite
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    Some people would claim it's a matter of semantics, MM, but I'd beg to differ.

    Just search the forums for "wombling" and you'll see what I mean. There are hundreds of posts on the subject but one recent long one is: http://forums.moneysavingexpert.com/showthread.html?t=393345&highlight=wombling. The first post says it all really: "how much can you get away with before you get caught?" is the gist. :rolleyes:

    Oh, guess what (edit)? Another "let's commit fraud" thread: http://forums.moneysavingexpert.com/showthread.html?p=10698257#post10698257.
  • MSE_MartinMSE_Martin MoneySaving Expert
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    Thanks for the message - let me respond to a few points...

    1. The 'get our advice then go elsewhere'.

    THis is something it is practicable to do. As such if I didn't write it I would be questions as to why not? However I think its import to understand where this comes in the realm of things...

    Firstly its not something I say on TV - for the wider audience - the message is simple... if i'm very short of time its "use a mortgage broker" if i've got more its "use a whole of market mortgage broker" if i've more i then explain about fees and say "my preference is to use a fees free broker, though if you are comfortable and prefer one who charges fees that's fine."

    The note you write about is in my specific "mortgage broker getting advice article" which is a deliberate attempt to cover as much info and options as possible for people who want the full details.

    I have to tell you as in many of my "more advanced" sections the proportion of people doing it is negligible. In fact as many of you write "if people actually did that"... I think its evidential. Yet for me - it is important to explain the practical possiblity so as not to be amiss.

    The idea that this is a reason to top myself as the letter writer stated is a load of nonesense. I think mortgage brokers need to take whats written and said in the whole - and realise that 99% of the message people take from this site and my media work is "use a broker"...


    2. Lovely to read broker response

    This site allows brokers to respond, to add feedback, to declare they are brokers, with a code of comment drawn up with broker support - to help protect from criticism of other users. I have always supported that. Remember other sectors aren't allowed something similar. The fact brokers are here debating it and on the mortgage board is telling in itself!


    Martin

    PS I was going to reply more on this - but I've got peopl ehere for filming and will have to finish it later.
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
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  • MarkyMarkDMarkyMarkD Forumite
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    Thanks for the response, Martin.

    Whilst I can see your point about mentioning things which are options, albeit unethical and (in some cases) risky ones, it's only a good idea to do so, surely, if you point out the drawbacks. Saying "it's a balance of ethics and practicality" is scarcely covering off either of the points. Perhaps saying:

    - it's unfair to get advice from someone, with the sole intention of then getting the mortgage direct or from a cashback operation; and
    - if you don't take the mortgage recommended to you, via the firm which does the recommending, you are losing the legal protection afforded to you by that arrangement and are entirely responsible for your own choice of mortgage.

    I've said before on this thread that I seem to be the only non-broker interested in defending their interests. And I'm not criticising the concept of people buying direct or from a cashback firm, per se. I would probably do so myself - but that's because I do know what I'm talking about regarding mortgages. Well over 90% of those who read MSE frankly don't know enough to make a decision of this magnitude themselves, meaning that the only way they are going to get the best deal by using a cashback firm is to exploit another adviser's time and effort for no reward.

    I suspect that Martin's right that few of those who use the cashback firms do actually take advice from another firm, and then switch to the cashback firm at the last minute. But that's likely to mean that they are using a cashback firm purely for the cashback, and potentially missing out on a more suitable mortgage.

    But I also reckon it's very hard for any broker to know whether a customer of theirs has gone down the cashback route at a late stage - presumably very many mortgage enquiries never get further than advice as to the best product, and then the customer mysteriously disappears for any number of reasons?

    Note the asterisked footnote in Martin's table comparing the options in the "sneaky" article:

    Sneaky.jpg
  • MortgageMammaMortgageMamma Forumite
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    Why is it that there is no comparison in this table for a typical fees free broker? I only see one for London and Country. That would really lead some of the less savvy moneysavers to believe that they are the only player in the fees free market, which we all know is not true.
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • MSE_MartinMSE_Martin MoneySaving Expert
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    Why is it that there is no comparison in this table for a typical fees free broker? I only see one for London and Country. That would really lead some of the less savvy moneysavers to believe that they are the only player in the fees free market, which we all know is not true.

    Pure oversight... i'll get that changed this week. We havent done a full rewrite of that article for a while; its on the list but there are other priorities.
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
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  • MortgageMammaMortgageMamma Forumite
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    MSE_Martin wrote: »
    Pure oversight... i'll get that changed this week. We havent done a full rewrite of that article for a while; its on the list but there are other priorities.


    Good stuff. thanks,

    Lisa
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • MSE_MartinMSE_Martin MoneySaving Expert
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    Having gone and re-read the article I am actually even more flabbergasted by some of the comments. The article is a call to arms towards mortgage brokers... Of course in there i suggest

    1. Do pre-research
    2. Check more than one broker to ensure you're happy

    But none the less its a call to arms for mortgage brokers. I've just re-read the 'controversial bit' and it says...

    "Playing brokers off against each other

    All the national brokers above only charge upon completion of the mortgage, and as it's always good practice to seek more than one opinion, why not try a few? Though do check that the brokers aren't doing a credit search on your file when this happens, as then shopping around may actually hurt your credit score and mean you get a worse deal (see How Credit Scoring Works article).

    The other benefit of this is that some of the bigger brokers often have exclusive deals from lenders; and this is worth checking out – though remember to weigh up the benefit of the exclusive deal against any broker fee you may need to pay.

    This also opens up an interesting possibility. It is of course possible to take the info from a ‘fees based' broker and ask a ‘fees-free broker' (if you want continued broker help) or cashback website to process it for you. This is a balance of both ethics and practicality. Overall, it's likely you'll want to stick with the broker who gave you the best advice, but the option to cut the cost is always there."

    As noted in there - it is not a recommendation - but it certainly is an option. If you take the piece in its entirity I think to respond negatively (or as the original letter writer did - notify my to kill myself) is a massive overreaction.

    I am happy having read some of the correspondence above to clarify why it may upset brokers by adding in the sentence...

    "by doing this you have taken the broker's time but not allowed it to be recompensed for the advice by gaining a fee."

    As justifiably I think its possible to say some people may not have realised that. However I think the option still one it is important to raise for those at the margin of techniques; looking for the advanced options. It is for them to decide whether to do it or not.

    Yet to use this to make me out as some great nightmare beast out in the night to kill the broker business is risible.

    Martin
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
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  • tp306tp306 Forumite
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    Whilst I understand why many of brokers are so upset about this issue they need to realise that business is often unfair and customers sometimes can be as unethical as many of the firms they're buying from.

    I wanted to buy a decent lcd tv not so long ago, and I visited a number of stores and asked their sales staff for advice and opinion. I then went home and ordered the tv I wanted online at a cheaper price than I'd been offered. By the arguments above that was an unethical thing to do. True but I got it cheaper because I put some work and energy in to it and if those stores missed out on my business it's because they weren't competitive enough.

    How many of the brokers and advisors above have done things similar in their lives?
  • MortgageMammaMortgageMamma Forumite
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    tp306 wrote: »
    Whilst I understand why many of brokers are so upset about this issue they need to realise that business is often unfair and customers sometimes can be as unethical as many of the firms they're buying from.

    I wanted to buy a decent lcd tv not so long ago, and I visited a number of stores and asked their sales staff for advice and opinion. I then went home and ordered the tv I wanted online at a cheaper price than I'd been offered. By the arguments above that was an unethical thing to do. True but I got it cheaper because I put some work and energy in to it and if those stores missed out on my business it's because they weren't competitive enough.

    How many of the brokers and advisors above have done things similar in their lives?


    I see what you are saying but there is something quite different with financial services. If you walk round the shops, suck a salespersons brain dry about all the models of tv you can have and which best suits your needs and then go and buy it online, you have not compromised yourself one bit. You still have your consumer protection and your statutory rights. You can return it if its broken or if it doesnt do what you were told it would do. You have a guarantee for a limited period of time that will take care of any problems.

    Also you may have just been "sold to" by the sales person and their advice could be biased to one particular provider with you knowing it. It could be commission bias or it could just be the store manager wanting to flog a load of stock that isnt shifting.

    If you went to see someone highly qualified in audio visual equiptment, an independent retailer with access to ALL MAKES AND MODELS, say someone who knew all the tech specs and capabilities of ALL the brands, you spent an hour of this persons time explaining your circumstances and what you wanted and they went away and researched for three hours based on your needs and then found the cheapest they could that matched your needs, presented it to you in a report - why would you need to buy it online? How could you morally justify wasting half a day of someones time for nothing? would you like it if your employer took half a day of your time and didnt pay you for it?

    Financial services are just as technical as the models of tv you might have looked at. Probably more so. Apart from the moral issue of taking someones time and reducing their productivity as a result, if you take advice from a financial adviser and then go and buy the product direct, YOU HAVE NO RECOURSE. You cannot sue the adviser if the advice proved to be wrong and you suffer financially as a result. You have to transact the business with the adviser to enable you to benefit from the consumer protection afforded to you via our regulation. Added to that, if you take advice and transact through a financial adviser/mortgage broker, that professional carries a lifetime of liabilitiy for the advice and transaction carried out through their firm. No 1 year guarantees with us.

    There are a lot of chancers in this life, a lot of people who think they can do it themselves where finance is concerned. People read sites like this and become overconfident and fail to appreciate the complexity of the products they are buying without advice.

    I've lost clients when they have gone direct to the lenders themselves after taking advice from me. Its a really smug feeling when they come back with their tails between their legs because they can't do what they thought they could. or what the lender told them they could initially. There will always be a need for financial advice. Anyone with a brain knows that. Brokers and financial advisers will always be around because we add value to transactions and give confidence to our clients that they are taking the right course of actions. A good adviser will ensure all your needs are met and educate you on the products you are considering.

    The only thing that will change about our profession is how we are remunerated. If people continue to waste the time of fees free brokers pretty soon we will all be charging fees.
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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