why you should REALLY support brokers

HelpWhereIcan

silvercar wrote: »

I think it is the lender's dual pricing that really makes a broker's comments about lifetime liabilities hard to swallow.

If I go to a whole-of-market broker and they spend their time, do appropriate research etc and find me a deal with a lender that is then offering the same deal in all detail except a lower interest rate direct, what am I meant to do?

Pay the extra interest for 25 years for what, the reassurance that this is the best deal? But it clearly isn't because I can get the same deal with a cheaper rate myself. OK I won't get the professional liability for the mortgage, but if the broker was prepared to offer it, then presumably they are saying that it is the right deal for me, so why shouldn't I take the cheaper option?

I think this is where this thread needs to be read alongside Payless's thread cautioning about the use of brokers at the moment

http://forums.moneysavingexpert.com/showthread.html?t=880695

if your broker will not include direct deals in their comparison and works solely on commission then you are correct.

if they will look at direct deals for you and provide a written reccomendation for that direct deal, then I would argue that their advice is worth paying a fee for. Even if that fee is only £100 -£200 you have still had every deal on the market compared and have someone taking responsibility for the choice of that mortgage for you.

The current market is a watershed and one that may lead to more transparency in the market.

The rise of professional advice, paid for in a professional way and the end of dual pricing are not mutually exclusive. In fact, many would argue that are mutually dependant.

dunstonh

I do not consider ours a 'profession'.

I dont think mortgage advisers can be classed as a profession until the level of qualifications and standards are increased. That doesnt mean there are not professional mortgage advisers.

I wouldnt class IFAs currently as a profession yet although the FSA proposals for next year would change that and make it a profession as investment advisers will be split between higher qualified advisers giving advice and lower qualified sales reps selling products. A clear difference in the definition. The same should be done for mortgages in my opinion.

BTW, with reference to places like Cavendish being the best place, it is worth noting that the best pensions in respect of investment options and lowest charges are not available to buy execution only with Cavendish. They only offer a tiny range of products on their execution only panel. An IFA could set up a £100pm pension, take £2500 commission and still come in cheaper than Cavendish on their nil commission options if they wanted to.

Conrad

cells wrote: »

the truth is, they offer nothing of value

Cells, I stated above we offer little or no value for intelligent, well organised clients who can quite simply arrange thier own affairs.

Such clients are often considerably more intelligent than the broker.
I console myself with the thought they in thier own occupation are probably poor anyway, most especially IT programmers and engineers that have an inbuilt inability to think things through thoroughly - for example my Audi dashboard cannot be wiped with 99% of dust cloths without taking halve the fibres with it, or the idiot programmers that consistently provide pathetic results in almost everything they touch (online mortgage applications with dozens of OBVIOUS faults), or writers of instruction manuals that seem to have been p1ssed when they discharged thier duty.


Are you of one of those IT people, as they too would not have anything like the lattitude to imagine the full gambitt of clients we are invaluable for - not just liars!

In a way we can all do most things ourselves - IT programming for example is just a simple formulaec process. Even Doctors seem to know less than many of thier patients as the patients have had time to research thier own illness - this is very common I find and with anything nunusual they often seem not to have a clue and its only the patientsd own forcefulness that FINALLY yields a result.:rotfl:

Conrad

dunstonh wrote: »

I dont think mortgage advisers can be classed as a profession until the level of qualifications and standards are increased.

I agree. We dont let London cabbys lose until they've undertaken The Knowledge, which I think typically takes around 2 years, yet we let some spotty oik lose on the public after a few weeks.:eek:

HelpWhereIcan

Can I just make one (hopefully last) more observation about where I feel brokers have/continue to add value to mortgage customers?

In the 'good old days' of mortgage lending (when income multiples and house prices were sensible and your bank manager knew your mum's bra size :rolleyes: ) you had the choice of a couple of deals, often with extended early repayment charges and normally compulsory associated products.

The increased competition within the market (helped in part by the growth of the mortgage broker) led to the end of the early repayment charge overhang and compulsory insurances as the norm.

A broker would normally steer their client away from this kind of deal in the selfish aim of getting their own cross-sales for insurances and being able to remortgage the client again at the end of a deal without them having to incurr an early repayment charge.

Do not underestimate the effect of this. In recent years something like 60 - 70% of all mortgages have been arranged through a broker and I don't want to bore you by going into the role that mortgage clubs and networks have played in increasing the buying power of brokers with lenders looking for increased market share and wider distribution.

Now that desire for market share and distribution has lessened and they have their own sales staff to keep busy, lenders have chosen to try and cut brokers out to an extent (fair enough), but - importantly - not completely.

This also means that we have seen the return of - compulsory ancilliary products eg some lenders insisting that a current account is opened with certain deals only available to holders (and users) of certain types of account (First Direct, HSBC, Halifax, Abbey, Nat West); extended overhang products (Yorks B Soc, N&P) ; larger, non refundable fees being payable upfront (HSBC, Britannia) etc etc.

The competition will come back, brokers will still be around (possibly in a different form). If they don't you may not see the same choice of product again and a certain amount of disadvantage to those customers unwilling/unable to pay for advice.

Dan_Collins_2

Conrad you make some good points.

This industry is full of suits, buckles and BMW's with egos to match! They call them selves professionals but spend less than 6 months going through Ce-map and then sit in a room with 10 other advisers and a tutor openly hellping each other to pass a test!!

Scary!

Then again, the way you conduct your self with clients and making sure you research your market and stay a head of the game is being professional.

I like to sleep at night, so I tryto stay ahead of the game and keep my self up to date and so do the guys in our office.

I think this is why you can get such a varied opinion of brokers and IFA, such a wide and varied market place with many different people in it for different reasons!

silvercar

HelpwhereICan wrote:

if your broker will not include direct deals in their comparison and works solely on commission then you are correct.

if they will look at direct deals for you and provide a written reccomendation for that direct deal, then I would argue that their advice is worth paying a fee for. Even if that fee is only £100 -£200 you have still had every deal on the market compared and have someone taking responsibility for the choice of that mortgage for you.

That would be something I would be happy to do; though I'm on a lifetime tracker and the answer I would probably get is to stick with my current deal.

silvercar

Clearly there are a lot of brokers having a hard time at the moment (as are estate agents, removal men, builders etc).

Do Brokers use IFAs in a personal capacity?

Advice from my IFA is that you should make sure your business is operating efficiently in the good times as well as the bad. If there is any chance that your business is cyclical then you should be making sure you have reserves in the good times to tide you through difficult patches.

Now is not a good time for brokers but TBH the last few years have been kind. As house prices and salaries and salary multiples rose, the percentage commission paid on deals meant that each deal netted far more dosh than before. Compare the average commission on a deal in 2006 to that in 2001.
It may well be now is a time to rely on your reserves.

There have been posters on the houseprice board talking condescendingly of how people should have realised that houseprices can't always go up etc Being in the industry I would expect that brokers would realise that the fall in house prices and the credit crunch would mean that business would suffer.

cells

HelpWhereIcan wrote: »

Next time I see my brother I am going to call out "Cells!!" when he's not looking and see if he responds.

He is also an engineer in R&D and he doesn't see the point in anyone else's job either!!!

He often complains to me that his firm's Sales Director earns more than he does when he has come up with things that have earned his company millions.

He doesn't like it when I tell him that, for the company to earn millions from a product it doesn't take someone to design it and manufacture it. It takes someone to sell it and ensure that it gets the distribution it deserves,

How many times have we seen someone on Dragons Den with a great idea for a product they can't shift. You can have as many great ideas as you like, but if you can't get people to buy it, your product is worthless.

In business sales volumes talk. That's why it is very easy to work out the value of a sales person to a business and much harder to guage the value of an R&D engineer.

My brother is, by the way, the first to rail at me about the way various companies have ripped him off with the products (not just but including financial) he has bought from them. Problem is, he rarely takes advice and does all his own research on the internet!

Having a father and a brother who are professional engineers means I am only too aware of how engineers are the only people who contribute to society and everyone else is in for a free ride doing things an engineer (even one who is not chartered) could do faster and cheaper with a slide rule!!!

i respect anyone who takes pride in their work and does a "good days job".

as a mortgage "advisor" do you know what the following mean & how they affect your clients and your job! dont google it


fiat currency
inflation
deflation
base rate
LIBOR
Swap Rates
Bonds
Gilts
average wage to average property price



unless your advice for the last 2 years was DONT take out a mortgage and DONT buy. you have either conned them for your own gain, or you where too "stupid" to know that you coned them for your own gain! either way, you have gained from the current and future pain of yur "clients"

HelpWhereIcan

cells wrote: »

i respect anyone who takes pride in their work and does a "good days job".

as a mortgage "advisor" do you know what the following mean & how they affect your clients and your job! dont google it


fiat currency
inflation
deflation
base rate
LIBOR
Swap Rates
Bonds
Gilts
average wage to average property price



unless your advice for the last 2 years was DONT take out a mortgage and DONT buy. you have either conned them for your own gain, or you where too "stupid" to know that you coned them for your own gain! either way, you have gained from the current and future pain of yur "clients"

:rotfl: :rotfl: :rotfl:

Danny? It is you!!!

How many times have I told you to stop lifting all your arguments from a web site?

Do you know what 'ad hominem' means and why it is, perhaps, a slight over reaction to a bit of gentle ribbing? (No googling now! )

:rotfl: :rotfl: :rotfl: :lovethoug