"Whole of market" not quite so

robertjonesuk

payless wrote: »

I would be very surprsied if they did not know the direct deals from Woolwich when they recommended the more expensive broker deal
( same issues with CG , halifax etc)
....
remember there's nothing in this world as a free lunch- if as a conusmer you can't / aren't comfortable with doing your own research ( you seem able) paying for TRUE WHOLE MARKET research may be a better option than the so called "fees free advisers "

FSA say brokers aren't doing anything wrong in recommending broker deals, but should make consumers aware of the restrictions.

if a company implied to you- or expressed on their website that they do cover all deals - then I guess thats misrepresentation- but hey as all "consumer" websites (inc MSE) seem to recommend just a few national brokers , there seems to be a lack of coverage of this point.

BTW of course dealing direct with a lender won't always be best- lack of service, fees not highlighted ( woolwich charge a £275 exit fee )- some of us see this dual pricing as a BARRIER TO ADVICE .

sometimes direct dealing with a lender is better as they know how the product works. in case of woolwich i had plenty of complaint from customers who took a ww mtg from a broker but were not explained how offset works, how they can do overpayments, that they can apply for a mortgage reserve at th the same time as they apply for a mtg and many many more...

homer_j_3

I think what you will find is that the customer has been told in most instances but due the mass amount of information they take in through the whole process, it gets lost along the way.

I have customers telling me that the bank haven't told them this or that and you have to accept that you will get the "my broker never explained" argument just as much as we get the "the bank didn't explain that" etc.

Consumers benefits to use a broker far outweigh those to go to a single product provider but at the moment with the 2 levels of pricing, consumers are losing those benefits.

Rick62

HelpWhereICan, posts 18 & 20.

Looking at your 2 posts and their length being a function of how difficult, complicated, messy and time consuming it is to give true whole of market advice now - and for what, a fee of £150?

Maybe if you have a great location, or have built a client bank over 10+ years you can make a living like this. I typically pay £30 to £70 for a lead, from which in good times I might convert 30 to 40%. So charging £150 would not cover my lead cost.

I actually don't think it is possible to give true whole of market advice, because in fact we do not know the direct deals, they often do not show correctly on sourcing tables (where included) and their terms are often not clear from the lenders web sites, if they are even on the websites.

The market right now is a complete mess. The irony is that borrowers need good advice more than ever right now, but there is no way they can get it. The further irony is that the honest professional brokers will be the ones to lose most business by sending clients direct, then go out of business leaving just the dodgy sales ones left. A triumph for regulation.

BlueScoob60

Rick62 wrote: »

HelpWhereICan, posts 18 & 20.
The market right now is a complete mess. The irony is that borrowers need good advice more than ever right now, but there is no way they can get it. The further irony is that the honest professional brokers will be the ones to lose most business by sending clients direct, then go out of business leaving just the dodgy sales ones left. A triumph for regulation.

Well I've just logged in for the first time since friday - it's obviously quite an emotive subject. I hadn't realised when I made my initial posting, but it's interesting to see the number of you out there involved in a financial advice capacity responding here.

I totally agree with the above quote. The guys at L&C and Chase de Vere both told me that they were unaware of the direct deal being offered by Woolwich. The Woolwich website doesn't state all the T&Cs about the direct offer - which actually makes it an even more attractive deal, and the Woolwich themselves told me that they don't offer this 'version' of that product via the brokers.

When I spoke to the brokers (and they had checked out the website themselves) they both said "Oh well, I don't blame you for going direct. That's a much better deal". In fact, after looking into it for me, the guy at Chase de Vere told me to book it directly with the Woolwich.

With the mortgage offers being changed/withdrawn/limite on an almost daily basis at the moment, I can't quite see how ANY broker manages to stay up to date with what's being offered by whom, whether via brokerages or direct from lender.

payless

BlueScoob60 wrote: »

With the mortgage offers being changed/withdrawn/limite on an almost daily basis at the moment, I can't quite see how ANY broker manages to stay up to date with what's being offered by whom, whether via brokerages or direct from lender.

Its not easy - but then if it was there would be no need for them / us.... or if it was that simple the national big brokers would be able to just man their lines with unexperienced telesales people....................

*MF*

HelpWhereIcan wrote: »

<snip>But I do think it illustrates the fact that the FSA and media need to educate the population about the need for advice before condoning dual pricing.

Until people realise what advice means and that it is something that has to be paid for, the power will be in the providers' hands... .<snip>

Very interesting thread, and some very interesting posts - and please do not think HelpWhereIcan, that I have highlighted your comments as criticism in any way whatsoever, but simply as a background to what I wanted to say

Anyone engaged in financial services (which I once was for most of my life) knows that there is a fundamental difference between independent financial advice and advice on a product.

Seems to me, particularly in today's dual pricing market, that it is for the advisers to distinguish that essential difference, leaving it to the FSA and the media is not the way forward - nor may I say does advice per se have to be paid for - "worthwhile independent" advice has a value, imho - a very real value - and when that value is understood by the consumer then, and perhaps only then, will it be willingly paid for.

So ... were I still in the market, again I would stress today's market in particular, I would be campaigning for a Trade Association campaign to offer a "Second Opinion" alternative from independent advisers to all those who have gone direct. A "Second Opinion" to act as a double check on whether what they have been told, and offered is indeed suitable for their individual circumstances.

Some advisers might offer that "Second Opinion" free, some might charge a fee - that is up to them, but if you want to challenge the power now wielded by the providers, and be a true "Whole of Market" adviser - and imho crucially, if you believe there is "value" in independent advice in the best interests of the consumer - that would be my way forward.

Just my 2p ... and I confess a hesitancy in posting this, but for those still active in the market, I believe such a campaign would not only be in the consumer's best interests, but also be in your best interests given the current FSA position on segmenting the market between sales and advice.

homer_j_3

I see where you are coming from, but with lenders processing these deals in a conveyer belt style. It is often too late for the customer to get that second opinion as they are signed up already.

I have always thought that Advice and Sales needed to be separated in this process as the crossover is sometimes hard to distinguish for the client. I thought it was coming with the Retail Disribution Review, however, the FSA have said it will not happen in the mortgage world yet.

What is required is for the FSA to say in my opinion:

We are simplifying the advice process for consumers. You either are a single product provider or you provide advice on every lender. There is no in between

If you are a qualified individual working within single product provider, you are a sales advisor for that company. If you are providing access to every lender then you are an advice giver as such. To avoid dual pricing issues, if there is a local branch, then the adviser must send the client to the branch for completion of the application and rules created about cross selling and use of that customer data etc.

They need to bring rules in for uniform information that has to be produced to the FSA and start to regulate companies that offer best buy tables etc. The tables can be sponsored still but the playing field has to be level and consistent across the market in terms of every table produced mentioning a deal will provide the same information.

Where the person who has access to every lender/product provider is giving advice, they can only do this for a fee and no commission can be paid/received. Where people can demonstrate that they are unable to pay for the fee, then the FSA should implement laws that these means tested individuals should be able to access this service on a legal aid type scheme.

I am not saying we need to deregulate but I think that there is merit in trying to make sure that there is transparency in what we do and if we all have to play by the same rules and if advisers and banks are forced to create a link then dual pricing would not be an issue, people would get advice not sales men as such and every lender would probably open their doors to brokers on the basis that they are not paying commission out and we can drive people into their branches.

dunstonh

We are simplifying the advice process for consumers. You either are a single product provider or you provide advice on every lender. There is no in between

Looking at what the FSA is proposing for investments advisers could give an indication for mortgage advisers in the future.

The only type of advisers in future will be IFAs. Everyone else will be salespeople. IFAs will also be fee based but will be able to use commission to offset the fee. The FSA has said it wants to put a stop to product providers setting the level of remuneration. Advisers will have to be independent. Multi-tied or tied will be classed as sales.

Now of course there is no guarantee that the FSA will extend these to mortgages (they have said they dont intend to at this time) but it would be logical.

HelpWhereIcan

Rick62 wrote: »

HelpWhereICan, posts 18 & 20.

Looking at your 2 posts and their length being a function of how difficult, complicated, messy and time consuming it is to give true whole of market advice now - and for what, a fee of £150?

About 2-3 hours for a factfind and associated research to come up with the reccomendation actually compares very well with spending the same amount of time again plus another 5-8 hours processing the application to offer for a total of £350 on a straightfoward £100,000 remortgage.

Being paid for the actual hours done is more fair for both the adviser and the customer.

Rick62 wrote: »

Maybe if you have a great location, or have built a client bank over 10+ years you can make a living like this. I typically pay £30 to £70 for a lead, from which in good times I might convert 30 to 40%. So charging £150 would not cover my lead cost.

I have a growing client bank, one that provides a decent amount of referrals and renewals but not enough to keep the practice going as I would like. We all need an amount of new business.

I would argue that the model I am currently testing actually helps to seperate those looking for quality advice from tyre kickers. The young lady I referred to took up all of 15 mins of my time on the phone. Had she come to a 'free' appointment, she may well have taken up an hour or two and still gone direct to the Halifax for which I would have received nothing anyway.

Rick62 wrote: »

I actually don't think it is possible to give true whole of market advice, because in fact we do not know the direct deals, they often do not show correctly on sourcing tables (where included) and their terms are often not clear from the lenders web sites, if they are even on the websites.

I have yet to hear of a deal that does not appear on emoneyfacts or the lender's site. Even my local Beverley Building Society appears on there with decent detail.

Any adviser who claims not to know which lenders are dual pricing and what they are offering (especially the main 5) is being less than honest in my opinion. Even Mortgage Solutions today carries an article about how the gap is closing with HBoS and Nationwide deals. Anyone who has not looked at those deals to see where any potential issues/advantages may lie is unwise as well.

It took me 5 minutes on the phone this morning to get to the bottom of a direct product transfer deal that the Skipton are offering. Quick phone call and my BDM gave me all the product details and offered to arrange the paperwork so the client does not need to deal with the branch.

Rick62 wrote: »

The market right now is a complete mess. The irony is that borrowers need good advice more than ever right now, but there is no way they can get it. The further irony is that the honest professional brokers will be the ones to lose most business by sending clients direct, then go out of business leaving just the dodgy sales ones left. A triumph for regulation.

Agree with most of what you said. I plan to see the current market (which is not just about dual pricing) through but expect to be in an industry that has seen the RDR force advisers to look at fee based remuneration anyway.

luckyfool

payless wrote: »

Its not easy - but then if it was there would be no need for them / us.... or if it was that simple the national big brokers would be able to just man their lines with unexperienced telesales people....................

They don't?

heh, just joking!