Some mortgage brokers dont know who their friends are

135

Replies

  • tp306tp306 Forumite
    10 Posts
    Hi MortgageMamma

    You have some fair points and they're well made. I do think though that those are points you should be making with your "potential" customers when you first meet with them.

    To use those arguments to beat MSE over the head is unfair. This website is here to help consumers save money - I don't recall it ever having any other motivation. The practice of taking excellent advice from one source and not paying for that advice is an ethical and morale judgement for the consumer and shouldn't be for MSE to make.

    The site is here to show you that you can save money but it's for all of us to make the choices as to how we do that. I don't believe MSE should need to go in to to much detail as to the ethics and morals in broker advice anymore than he should spend too much time worrying about helping us find cheap flights and then detailing pages on carbon offsetting or whether he should tell us about the latest Threshers voucher and worry if we're all alcoholics. It's for the buyers conscience not his or his staffs.

    When it comes to the technical and legal side of things I don't think we should expect this site to go in to detail about it. There should be a degree of self-responsibility on the consumers side and it would be ridiculous to expect this site to be able to cover everything considering the sheer scale of topics that are covered. That's where you, as the expert, come in when I approach you as a customer.

    A line warning us all to check the legal ramifications in an article would be reasonable enough to suggest but I do feel that the detail needs to come from the experts in the field not from this site.

    Some of the things you've pointed out would make me think twice about how I used a broker but it's your sales pitch to me that counts. The more I trusted you and the more information you gave the greater the chance would be that I'd stick with you all the way. I don't believe you should expect MSE to do that side of the job for you.

    Regards
  • minimike2minimike2 Forumite
    2.2K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    ✭✭✭✭
    "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 in itself is misleading. Its like saying "use L&C because they will have the best exclusives".....To someone who does not know how the market works, that is how it reads.

    Yet...I am part of a two man band. We are part of the Intrinsic Network. A big network, lots of exclusives....we had a deal with Abbey a couple of months back that no one else in the market could get near by a long long way......but if someone had read that line, they could possible have dismissed me as a two man band because I wouldnt have any good exclusive deals....

    We could go on and on all day about things that we dont agree on wording with im sure.
  • MortgageMammaMortgageMamma Forumite
    6.7K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    ✭✭✭✭
    Hi TP, just wanted to say I'm not jumping about on the site demanding anything and on the whole I support the ethos of the site and what ML is doing.

    My response to you was for YOUR benefit and that of the consumers reading this thread. I am not purporting the site deal with things in the manner I have suggested - I have my own voice and can campaign for fairness to brokers from consumers myself whenever the opportunity presents itself.

    However, one further thing I want to add is this. A broker/client relationship should be built upon trust and mutual respect. Most brokers do not mind their advice being challenged by a client as it is all part of the education process and sometimes on the odd occassion the clients do have relevant points which can be built into the advice process.

    Brokers and clients should work together for the best results. If you need financial advice in future why not pay a broker a research fee of say £99, on the basis the broker researches direct to lender non commission paying deals also. That way its a wion win situation. if the best deal for you pays commission and you transact the business via the broker you can then have your 99 back....see some of my other posts about this. I think its a happy medium which is fair on both parties - its certainly the way I am working now - it sorts the timewasters from the genuine clients.
    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.
  • tp306tp306 Forumite
    10 Posts
    Hi MM

    Sorry, I wasn't aiming my thoughts solely at yourself, when I said 'you' I was being more general than that.

    And you're 100% right about the mutual trust thing. I'd be much happier paying money to someone that I trusted and got on well with than taking free advice that I was less comfortable with. The way you're working makes sense to me - at the end of the day it does need to work for both parties.
  • MortgageMammaMortgageMamma Forumite
    6.7K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    ✭✭✭✭
    tp306 wrote: »
    Hi MM

    Sorry, I wasn't aiming my thoughts solely at yourself, when I said 'you' I was being more general than that.

    And you're 100% right about the mutual trust thing. I'd be much happier paying money to someone that I trusted and got on well with than taking free advice that I was less comfortable with. The way you're working makes sense to me - at the end of the day it does need to work for both parties.


    Thanks, that was exactly the response I wanted. I've obviously made you consider other aspects that you wouldnt have normally known about, so I'm doing my job right, and you have proved to me that not all MSErs are immoral when it comes to saving money.

    MM
    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.
  • BrokeRageBrokeRage Forumite
    83 Posts
    Thanks for your response Martin; I hope I didn't come over as painting you as an ogre out to get us, it certainly wasn't my intention; I just wanted to point out the ethical dimension of this matter.

    TP, I don't equate the TV situation with mortgage advice (for reasons similar to those stated by Mortgage Mama), but I would not have wasted people's time in the way that you did. If I was looking for a high-spec TV, I would research it on the internet and then buy it that way or (if I didn't have the time to do that) I would go to an independent retailer and, if the advice was good and the product fairly priced, I would buy it there, if not I would go elsewhere.

    There is a basic problem in this country. Big providers of all sorts of products and service basically want the public to interact directly with them on the internet. They do not want middle-men (or middle women) to become involved at all really (and I include shop assistants, mortgage brokers, IFAs and many other service providers in this equation).

    There are serious flaws in this attempt to reduce the price of distribution, the first being that it removes advice from the process in that the organisation giving out the information is the same one that is selling it.

    The second is that it removes a great deal of potential liability from the process, because the "Terms of Use" that most people merrily click without reading is often effectively a legal contract that is not meant to be understood or considered.

    The third is the economic impact. If the only people to benefit from a product purchase are the consumer and the shareholders of the provider, then there comes a point when the number of consumers reduces dramatically because of the numbers out of work as a result.

    One of the reasons that mortgage brokers are so vitriolic about these matters is that they are fighting for their financial lives at the moment, due to the credit crunch and excessive red tape. The automatic response to this may be that no-one owes us a living (true) and that technology is making us dinosaurs (untrue). It is technology that makes us more valuable to the public, not less so, as the public need to be protected from the "Click-this-button-for-the-best-deal" approach that takes no account of personal aspirations or lack of consumer knowledge on this subject.
    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.
  • BrokeRageBrokeRage Forumite
    83 Posts
    I do not agree, however, that someone should pay a fee in advance to someone they don't know for information or advice that might be good or bad. That is like paying to go on "Lucky Dip"; I prefer to have tested a product before I pay for it. It's like Comet or Curry's charging an admission fee! The sad thing is that good brokers would not have to think of charging up-front if the public acted honourably in their conduct.
    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.
  • MortgageMammaMortgageMamma Forumite
    6.7K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    ✭✭✭✭
    In an ideal world the fees free model would work and would not be abused. But we don't live in an ideal world, the fees free system IS and ALWAYS WILL be abused and I dont think its a result of anything promoted on this site, its always happened.

    Brokerage, you are comparing buying goods to buying services, how can mortgage and financial ADVICE in general be directly comparable with buying an electrical PRODUCT? they are apples and pears.

    Solicitors charge hourly fees, as do accountants, as do many other professions. Doctors, therapists, counsellors, private tutors - all are offering a service and all charge a fee.

    The only difference with our profession is that the advice we give often leads to a sale rather than the solution to a problem - and we get paid commission for it. I am not a supporter as you know of blatant fee charging AND keeping procuration fees - although I dont sit on the fence of the fees vs commission arguement.

    I think all customers should get options as to the level of service they can have, and the first hour should be given for free to familiarise yourself with the customer, let the customer work out if they like you, talk through the objectives and talk through the method of payment. I feel strongly that as brokers we are offering a better service by looking at direct to lender deals and should not really be calling ourselves WOM if we don't at least offer to do that.

    I think eventually all brokers will work in this way. At the moment as a profession we are in a transitional period where many non fee chargers have to revaluate their business models (or drop out), tell their conscience fee charging with refunds if business is transacted is the right decision, and become more confident in presenting their service to clients in this manner.

    If people don't value a brokers service enough to work this way they shouldnt really be using it.
    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.
  • MarkyMarkDMarkyMarkD Forumite
    9.9K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    ✭✭✭✭
    I have to say that I think behaving as tp suggests in the TV example is just as wrong as abusing a broker's free advice. It's exactly the same scenario, to be honest. The reason that the high-street retailer can't price competitively with an internet-only box-shifting operation is fairly obvious - it's because they have to pay their staff to waste time with people like tp - as well as having to pay high rentals for their showrooms compared to XYZ.com working out of their garage.

    I'm interested, MM, in how technically you manage to advise on all products including direct-only providers and direct-only products? I have seen other brokers claiming elsewhere that because these products aren't on the sourcing systems, it's completely unrealistic to expect brokers to even know about them and therefore to give full and complete advice. As I said earlier, the same brokers appear to have been advised that this is OK by their regulators (or at least, that's how I read it in this week's Financial Adviser).

    I'm pleased that Martin has agreed to some re-wording, although as MM points out it still doesn't refer to the loss of protection inherent in going direct or execution-only.
  • dunstonhdunstonh Forumite
    107.7K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭✭
    "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 in itself is misleading. Its like saying "use L&C because they will have the best exclusives".....To someone who does not know how the market works, that is how it reads.

    It is misleading as I believe L&C are not part of a network and therefore most of the mortgage networks are going to be bigger than L&C and either have the same deals or more. One of the key benefits of a network member.

    As for taking advice and going it alone, there is always a risk of that if you give too much away without getting some form of commitment. Its part of the job and one that an adviser needs to decide for themselves how much info they give before obtaining some form of commitment.

    There are people that wont use brokers and people that will. There are distibution channels to suit both so there isnt really a problem.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
This discussion has been closed.
Latest MSE News and Guides