why you should REALLY support brokers

BrokeRage

Dan_Collins wrote: »

Talking of data abuse, we had a large, very large lender poach a client away from our channels to direct channels!! We shall be reporting this to our rep and I am sure it will up set a few.

I AIP'd a case through Halifax late last year and her bank (Bank of Scotland) contacted the client the following day and offered her a mortgage that she had not approached them for. Amazing coincidence!

BrokeRage

Graeme7777 wrote: »

It seems to be that mortgage advisors have a number of "natural" avenues into which they can diversify. I would have thought that secured loans were a close fit, or other ways of helping people with their finances?

That's true, but why should we have to chase scraps when lenders claim that they are "Committed to the intermediary market"? It may be that we live in a world where meaningless platitudes are accepted by some, but I never say things that are untrue and I don't like it when people lie.

Maybe that is old-fashioned, but I think I am a moral individual and I don't like people or organisations who are immoral.

MortgageMamma

Having read the FSAs barely distributed leaflet on financial advice, I would like to share some of my initial thoughts with you all on the document. But I think you should read through it first (see link above)

I would be interested to hear your feedback on the issues I have raised as I am currently compiling my response to Lesley and there may be things I have not considered

Please excuse the dreadful grammar, I typed it very quickly and I've had a fair few G&Ts tonight.

Point 1. – it says financial advice can be received by banks and building societies (conveniently listed first) however the moneymadeclear website classes banks and building societies as unadvised sales – so which one is it? Do they or don’t they give advice? This needs full clarification as it could distort consumers perception on complaints and compensation arrangements. (page 5 para 3)

Page three, omits to mention that some Financial Advisers will also transact unadvised business.(last para)

The document does not point out the possible consequences to consumers of NOT taking professional advice beyond the compensation issue, i.e. getting it wrong and costing themselves a fortune, committing to an unsuitable contract which they cannot get out of without financial loss, the effect of multiple credit checks when applying for finance

There is no clarification for the customer on what the term “whole of market” means. This means the customer is most likely to perceive that the adviser is able to advise and recommend products from the entire market, without exception which is often not the case.

It is unreasonable to expect a consumer to understand the FSA definition of whole of market which in itself is illogical and open to abuse. It is in the consumers best interest that the FSA whole of market meaning is defined at outset as a mandatory disclosure by ALL parties involved in transacting regulated business, or even better than that, make whole of market mean whole of market and adopt the multi tied adviser category that we used to have (and indeed you promote on moneymadeclear)

The leaflet states the client WILL have to pay for financial advice which currently is not always the case. This could put the consumer off seeking professional advice in favour of unadvised sales as again the dangers of not taking professional advice have not been addressed in the leaflet. It then goes on to contradict this to say there are different ways a consumer can pay for advice including commission – it would be more consumer friendly if the aforementioned “will have to pay for advice” could be altered to “MAY have to pay for advice”. This will then accurately reflect the current situation. (page 7, para 6)

Page 9 – visiting an adviser. Should start with, “if you have chosen to take professional advice” – as not everybody will be following the advice route and this could lead a consumer to believe that they are getting advice when in fact they are not.

Page 13 – Mortgages – needs to add that Buy to Let mortgages will not have the key facts logo as not regulated.

Graeme7777

BrokeRage wrote: »

That's true, but why should we have to chase scraps when lenders claim that they are "Committed to the intermediary market"? It may be that we live in a world where meaningless platitudes are accepted by some, but I never say things that are untrue and I don't like it when people lie.

Maybe that is old-fashioned, but I think I am a moral individual and I don't like people or organisations who are immoral.

Your point is well made, BrokeRage, but instead of viewing diversification as chasing scraps, is it not instead just part of the necessary adaptations that most businesses need to make from time to time to survive headwinds in their industries?

MortgageMamma

There is absolutely nothing wrong with diversification at bad times. There are a number of opportunities where a broker can increase income. HIPs, legal referrals, will writing, go back on files and address unprotected clients again, but personally I think the way to go is to train as a debt counsellor and focus on that (if recent stats are right) - we basically are debt counselling with a lot of cases anyway. If you work from home you could try and combine brokering with another home based job. If all this fails then try and find a job doing something else - there is more to life than being a mortgage broker - as I said earlier in the thread I think its too much liability, too much stress, too much hassle, and too little financial reward for the efforts. It really is not a great market to be in anymore - I've no doubt it will recover but I don't like whats happening with regulation so I don't see a future for us. We are not free to use our judgement on any part of the advice process anymore - that takes the enjoyment out of the job for me - I've never been an order taker and I'm not about to start - certainly not from the FSA!

HelpWhereIcan

Graeme7777 wrote: »

It seems to be that mortgage advisors have a number of "natural" avenues into which they can diversify. I would have thought that secured loans were a close fit, or other ways of helping people with their finances?

I would like to think that most brokers have provided access to secured loans for a couple of years now.

For my firm the only real way to make more money from secured loans would be to arry out more of the underwriting (package) for a lender to get a larger commission. This however is likely to be a false economy as it would incurr additional costs for without the volumes to compensate for the additional work/costs.

Secured loans have seen a reduction in lenders available and the terms on which they would as well.

MortgageMamma

I'd like to see more brokers get together and openly challenge the FSA on some of the absolutely ridiculous concepts they are introducing to "protect the consumer". IMO they couldnt get it more wrong. Even if I de-authorise I will still continue to highlight to them where they are wrong, pester my convservative MP about how much money they cost us and how they are destroying a healthy market, and most importantly raising consumer awareness of what the market REALLY offers, how and how to get the best from it.

homer_j_3

MM

Your response is likely to highlight many areas where it is missing but I dont think you need to respond in detail as you have. This leaflet is specific to receiving advice for a number of products - pensions, investments, protection or mortgages for example. It is for this very reason, your argument should be that it is too generic.

I had a read of it and wrote some comments of my own down, which highlight your points in the fact that its not really clear but also why they may be saying what they are.

Firstly, the leaflet highlights on page 2 that this is all very general and it should not be used as a replacement for advice (which i find a little ironic on a leaflet telling you how to get advice).

You mention banks and building societies not providing advice. I would challenge you on that because i know that these institutions do offer access to both tied and independent advice. So, I would agree with you that people may be misled on the basis that they are not told that they should specifically ask for an IFA if they want independent advice. Remember this is not a mortgage specific document.

I would also pick the leaflet up on page 3 about recognising the difference on an advised service over a information only one. It should explain where to check on terms of business/menu/ IDD or whatever its called in the various sectors.

Once again, charging structures does explain that the client will pay for the service through a commission only route. I believe that proc fees are built into the overall pricing of a product but even if they are not, in the investment world, the way the adviser is paid can have bearing on the product - so it falls down to generic leaflet over mortgage specific.

Conrad

I do secured loans and nearly always add a fee to the loan sum to make them pay.
Just as difficult to arrange as mortgages, in some respects more so, for examplep; needing to obtain existing lenders consent to a second charge can be a fruitless excercise.
Self Cert applicants are generally expected to provide sufficient proof of trading - typically a recent trading invoice at the very least.

Again too many brokers in this sector also.

Dan_Collins_2

Thanks guys, after read all that you have confirmed to me that getting out of FS is a good idea!