why you should REALLY support brokers

homer_j_3

Its depressing at times but as the economy doesn't stop at the FS door, I would be very wary in these times of jumping from the frying pan into the fire.

Anything to do with finance on property and property itself are a no go at the moment for career changes. I think Investments are doing well and banks are too

What line of work were you thinking of moving into. Maybe thats another thread "If you weren't a broker, what would you be".

HelpWhereIcan

homer_j wrote: »

"If you weren't a broker, what would you be".

A beach bum. I'm a naturally lazy person.

Just that pesky (too good for me) wife and kids that mean I go out to work at all.

Left to my own devices I'd be an even less productive member of society that cells already thinks I am! My university years showed me that.

MortgageMamma

I think Homers going to start another thread for this as it could be fun, but we really should keep this thread focussed on the real issues. HWIC, you can only be a beach bum if you are good looking enough to pull a rich woman to pay your way in life ;-)

Dan_Collins_2

To be honest, I would be a lorry driver! Although I just want to get away from Mortgages, finance and house buying!

I am looking at sales, being a rep of some sort. No job is perfect but the gut have been ripped out of FS and I think it become more about covering your backside than really looking after the client.

Beach bum sounds good! Fingers crossed for the lotto at the weekend LOL

HelpWhereIcan

email received from NR sales director Mark Robson

Get calling all your NR renewals this month - you are on a month's notice for them to start calling all renewals due in September from 1/7.

Dear Colleague,

In line with our corporate objective to reduce our balance sheet through a programme of accelerated mortgage redemptions, we have today announced a new joint venture with Lloyds TSB. Further details are included in the press release.

You may already be aware that under our business plan, we have moved away from offering replacement deals to customers coming to the end of their current product. I recognise the important part that you play in that process by helping your clients find a new home for their mortgage when they reach the end of the deal which you originally arranged with Northern Rock on their behalf.

In addition, a proportion of our maturing customers choose to seek help from an alternative intermediary or come back to us for assistance. We will continue to work with a small panel of contacts in order to help such customers find a new deal elsewhere.

We now intend to augment these activities and broaden the options available to maturing customers. This new option will offer a unique service to some of our existing borrowers who reach the end of their current fixed rate deals.

In an arrangement with Lloyds TSB, we will offer some customers the option to apply for a mortgage from a selection of their deals.

The process of contacting such customers will commence in July, although we do not expect any remortgages to complete before September. In the meantime and going forward, we will continue to work with our customers towards completion of a remortgage by whichever route they choose.

We look forward to continuing our relationship with you as we remodel our business. You will be aware that our commitment to the intermediary market remains strong. I hope that you will take the opportunity to contact your Business Development Manager to explore ways in which we can work together in the future.

Full of contradictions (just as well my clients are diarised) fully expect the "augment these activities" means that it will be an active calling campaign. More fun - yay.

BrokeRage

homer_j wrote: »

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.

I think what was meant by MM is that banks do not offer independent mortgage advice....and I am 99% sure that this is the case. I don't think they "Offer" independent financial advice generally when they are dealing with a mortgage. They have a very strong vested interest in pushing clients down the route of buying "Tied" products, but it may be that you can ask to be referred to their IFA arm.

Finally, commissions are not really built into the cost of a mortgage deal. The reason that broker and direct deals have been similarly priced is that brokers do part of the lenders' admin and much of the marketing. Not knocking your view, but we pretty well put the application onto the lenders' system and effectively package it for them. If it is a re-mortgage with a desktop valuation, they have nothing to do apart from issuing the offer.

As for Northern Rock selling my clients to C&G/Lloyds, it is symptomatic of the way that lenders are acting now, i.e. disgracefully.

homer_j_3

That is what I was saying Broker - the leaflet is not mortgage specific.

MM's apporach with a mortgage bias on her arguments has pulled out some things that do not ring true if you look at it in our profession but remove the mortgage bias and look at the leaflet as receiving advice in general, it is not untrue as such. This in itself proves there may be a need for them to produce a more specific guide as the process for receiving financial advice is different to mortgage advice.

Commissions have to be built into the cost of the mortgage - equally as the cost of processing has to be aswell. It may not be justification on dual pricing but it has consideration on the cost as the product has to be profitable and has enough money in it to pay the proc fee and processing etc.

Anyway, either way, I believe commission only route being included in that section of the leaflet only highlights that there is a value to commission only in the sense we are paid for the advice.

I also had a conversation with an ex colleague today and apparently the national chain of panelled mortgage advisers were supposed to be looking at the NR remortgages also.... So I am not sure where peoples data is going.

Graeme7777

Hi,

Am I correct to surmise from what has been said on this thread that the future for giving financial advice (at least regarding mortgages/loans) is bleak as the lenders are seeking to reduce their costs by cutting intermediaries out of the distribution channel?

If so, is this just a cyclical event or does it represent a structural change in the way financial products are distributed in the UK?

homer_j_3

Its evolution I believe not cyclical.

Brokers have been a necessity for the increase in choice and range of mortgages that have become available since the days of having savings and sticking with the same lender for 25 yrs.

The market is now evolving again in my opinion.

Graeme7777

Thanks Homer_J.

And may I ask to where you see the market evolving? Surely not back to the situation where we all buy our financial products directly from the lender?