Some mortgage brokers dont know who their friends are

This is the discussion to link on the back of Martin's "Some mortgage brokers don't know who their friends are' as this discussion follows it.

Click reply to discuss below.


  • moggylovermoggylover Forumite
    13.3K Posts
    Way to go Martin! Have to say that I had my first two mortgages from a Broker and they were both excellent and from smaller, more customer orientated companies - got the third straight from the Bradford and Bingley and I would not touch them again under ANY circumstances as they are the most unhelpful bunch of Shylocks I have ever had the displeasure to come across!

    LOVED the answer to this idiot - bet he charges well over the top for his advice!
    "there are some persons in this World who, unable to give better proof of being wise, take a strange delight in showing what they think they have sagaciously read in mankind by uncharitable suspicions of them"
    (Herman Melville)
  • MarkyMarkDMarkyMarkD Forumite
    9.9K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    Whilst the broker's views are not exactly up-to-date (meaning that MSE Martin's views on this matter haven't got any worse over time), I think MSE Martin is, frankly, being unfair in some elements of his response.

    When he publishes an article on his site provocatively entitled "Sneakily get the best advice for free plus possible extra cashback", which includes the paragraph:
    This also opens up an interesting possibility. It is of course possible to take the info from a ‘fees based' broker and ask a ‘fees-free broker' (if you want continued broker help) or cashback website to process it for you. This is a balance of both ethics and practicality, it's likely you'll want to stick with the broker who gave you the best advice, but the option to cut the cost is always there.
    it's a tad dishonest to state
    MSE_Martin wrote:
    I certainly don’t ask you, as you suggest, to “give your services for free”.
    It's pretty obvious that a large proportion of the MSE population doesn't have any ethics in the slightest when it comes to saving money, so inclusion of weasel-worded comments about "balance of ethics and practicality" scarcely undermines the fact that this paragraph will lead very many people to do exactly what the broker was complaining of.

    Incidentally, the section of MSE Martin's reply:
    • I prefer fees free brokers.

    I also favour fees free, as there are many good fees free brokers out there who are whole of market. This seems to be the crux of your problem. Yet the rules are quite simple for me: if good advice exists without paying for it, then why pay?
    seems completely groundless. The original complaint doesn't give the impression that the broker concerned charges fees, or doesn't. I can't see any reason to assume he charges fees as well as relying on the lender's procuration fee.

    I'm not a mortgage broker, and nor do I have any financial incentive to promote them. I applaud MSE Martin for encouraging people to use brokers, rather than to meekly accept the best deal offered by their main bank or building society - obviously, that's good advice. But I also share the broker's discomfort with the idea of ripping off brokers by taking their advice without any intention of completing the deal through them. Brokers deserve a living as much as anyone else.

    I'm talking specifically about getting best advice from a broker, and then going to an online execution-only rebate firm here.

    The issue of "direct-only" products is a difficult one. I've seen a broker on MSE suggesting that, because of the current market situation, they are offering their clients the option of paying a search fee to research the entire market - including direct deals - and (presumably) rebating the search fee if the best deal is a deal available through brokers. That's a very morally upright approach to take - well done, MortgageMamma! It's certainly better than brokers who simply offer the best broker-available deal and keep quiet about direct-only deals - but who, apparently, have been told by their regulators that this approach is OK. Give me strength!
  • MortgageMammaMortgageMamma Forumite
    6.7K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    I have just read through the article and I have mixed feelings about what has been said and how to respond.

    My initial thoughts are that there is no wonder us brokers get a bad reputation if they are going to lash out like and make offensive personal comments to someone on a professional matter.

    I have to say here I have no idea who the author was but I make no apology for stating my feelings if its somebody who I already know on a professional basis. Knee jerk reactions and childlike tantrums will not prove or solve anything. If you have an issue that you feel strongly enough about to behave in a manner like that you would be well advised to approach it in a balanced and reasonable way. Making logical statements and using reasoned arguement will always have far more effect than shouting the odds.

    The mortgage market is tough, its always been tough and now its getting to the point where many brokers are being forced out of the market - mainly due to dual pricing and underhand tactics of the banks, low consumer confidence and a massive retreat by lenders on not only what they wish to lend, but the basis on which they will lend it. Feelings are running high with us brokers, believe me when I say some of us are suffering and many will go bankrupt if the market doesnt improve (quite possibly myself also). I am sure there are many people on this site who can identify with how that feels, and it is for this reason that I would appeal to the conscience of the users of this site NOT to take advice on a fees free basis and go direct. Its not good for you either.

    The mortgage market is changing, and the times when brokers were almost guaranteed to get you a better deal than you would directly are gone. They might be back in coming months, but for now they are gone. There are various organisations as well as brokers themselves lobbying the banks at present to try and turn this around. for the good of the consumer as well as our own profession!

    This is a moneysaving site, and if you REALLY want to know what the best deal is in the whole market and have the backing of a brokers recommendation then read on:

    1. Most fee free brokers will only advise on the deals that will pay commission. Including those brokerages recommended by this site. You can be confident this is the case unless they publish something to say differently. The combination of the fees free advice business model and the lack of mortgage business to be had at the moment makes recommending direct lenders/deal that do not pay commission to a fees free broker unviable at present, and lets face it we all want to remain going concerns/time is money.

    2. In consideration of this "new" market it is imperative that your broker gives you options. I feel the fairest way to deal with this new market is as follows.

    a) Charge a small research fee upfront at the first meeting, say £99, offer to search the commission paying deals, the direct to lender only deals and also deals from lenders which have never dealt via brokers, say HSBC, Britannia etc

    b) if the best deal is a commission paying deal, and the client wishes to transact - give them the £99 back on completion of the mortgage. This way the advice is effectively still fee's free.

    c) If the best deal is a direct to lender, advise the client on criteria/or for a further small fee go with them to the lender whilst they make their application to ensure it goes right (this overcomes the compliance requirement to have a KFI on file, as one could be obtained at this meeting). It could also be possible to sit down with the client and help with the application form/internet application for the direct product, we have copies of most of them.

    The above is my preferred option as it gives the broker wings to do whats right for the client AND still earn a living/save the client money.

    The other option is to tell the client you do not have access to direct fee's as they do not pay commission, and tell them that you will only research the commission paying deals if they dont want to pay a fee. Make sure the client is made aware that there may be better deals available directly with lenders to which you do not have access.

    The real key here is being upfront and transparent with the client and to take a little more time at the first meeting explaining the options.

    This is and always will be a competitive occupation. The only way to survive the market conditions without clients being compromised is to be totally upfront with them.

    I also think its important for brokers to give say the first half hour/hour of your their time free, to fact find and discuss the merits of and issues with the case before any formal advice is given. Many solicitors do this and I think its good practice.

    Martin I think it would be a good idea if you put a foreword in your article just to highlight to those reading it that the mortgage market is in a complex and often volatile stage at the moment, and that right now due to the constantly changing lending criteria they need professional advice more than ever. It is at crucial times like this that going direct to a lender really should be discouraged for a consumers own good. If you really do support the work of brokers, which I think you do - its in everybodys best interests to stop encouraging the use of mortgage cashback sites. First of all they strip the users of any recourse should things go wrong - no consumer protection and secondly if clients can get advice for free, why should they jeapordise possibly the highest and most important financial transaction they will ever make in their lives by going through these sites to pocket a couple of quid?

    I hope what I have said makes sense and is found useful by those reading. I understand not everybody will agree with my views on whats best but this is the proposition I'm putting in front of my own clients and most of them have been comfortable with it so far.

    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.
  • paylesspayless Forumite
    6.9K Posts
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Haven't read it all.. but my issue is that some ( inc some well known) fee free brokers are recommeding certain lenders- who they know have better deals direct.. ( not talking only HSBC- and in fact its not only the ratematcher that they had- but the the likes of C&G Halifax who have been dual pricing - unusually this time in favour of branches ) this is not against the rules, but I feel is morally questionable especially as some of these brokers make a point of claiming UK wide products or a point that they will recommend best regardless o commission or not.. so I feel Martin's comments of "I tell people to compare the non-broker lenders. " should be extended to compare all the direct deals as well.
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • paylesspayless Forumite
    6.9K Posts
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    So these events means that SOME fee charging brokers willing to include all lenders in the research are better than the fees free ones who don't
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • minimike2minimike2 Forumite
    2.2K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    My response from over on the mortgage & endowment board....

    I think to blog this is simply childish games.....

    Whilst the content may be a little unconstructive of the email to him, to actually make a blog about that is really, really, really pathetic.

    I think with a site like this it can only be EXPECTED to recieve criticism. I dont agree with the email thats been sent to him, but the public response.....utter nonsense.

    Im sure many of us have gripes with Martin. I do...many...! I dont like the way he encourages people to basically come to us for a mortgage, without paying a fee and go elsewhere for insruance (I would be out of business if this was how things worked), and that may not even be the best way of doing business anyway. A fee free "WoM" broker doesnt neccesarily deal with every mortgage lender - WoM doesnt mean EVERY lender that deals with brokers, as long as the panel they use represents the market, they can be called WoM. I dont like the way he actively recommends people dont take out CI insurance, a laughable recommendation in iteself. I dont like the way he actively promotes L&C when they have proved to be "hitty missy" on service..........and its meant to be an independent site, so the idea of recommending one brokerage is dubious anyway.

    But I havent sent an email in making a personal attack. Ive previously mentioned about journalists writing methods and got a personalised respone from Martin about my comment, and I was quick to add in my reply that overall I believe that he and the site do good work and is a valuable resource, but not without its flaws, the abovementioned being those flaws IMO.

    So overall, whilst I agree with the principles behind the email, there was no need for the way its been worded and whilst I agree with Martin that there was no need for it, there is no need for the public reply on it.

    Both sides should feel pretty stupid about the whole thing.


    Im also confused by the title "...dont know who thier friends are"......hmmm, actively advising people to use brokers then apply via cash back sites. Actively advising people to not take any other products through a broker, activly advising people not to take out CI insurance........If I get a case where its just a mortgage and nothing else and no fee, its not worth my time doing average mortgage size up here in the north east is £70000, so a proc fee on that for all the work and costs makes me next to nothing.....if not a loss!
  • dunstonhdunstonh Forumite
    108.1K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I have always found Martin is willing to discuss things when required and where a difference of opinion exists on something he does respond. Not always agreeing but at least he enters into discussion. So any abusive message sent to Martin is out of order. I would like to think it isnt from any of the long standing advisers/brokers on the board and its a shame that the brokers and advisers who have long supported the board will be tarnished by this. Tarnished by both the original person sending the message and Martin's response which seems to put all the advisers/brokers in the same group.

    If we are going to get into difference of opinions then there are inconsistencies in some of the things Martin does recommend. To highlight the three I can think of:

    1 - a fee based mortgage adviser can be cheaper than going to L&C or any other commission based adviser at this time. If you go to L&C and they only recommend a commission paying lender then the cost of that deal over say the 5 year tie in could be more than the cheaper deal a fee based adviser could get even with their fee.

    2 - a fee based IFA can be cheaper than going execution only for pensions than the execution only providers mentioned in his article (indeed on full commmission it still beat all but one execution only provider and was only just short).

    3 - Critical illness cover is virtually written off by Martin despite it having over 80% success rate on claims paying out. Indeed, if you remove the claims for things that arent covered by the policy this goes well into the 90% range for most insurers. Yet, we see articles promoting MPPI and that has an over 80% rejection rate on claims and very little coverage of the far superior PHI policies which have a much better success rate on claims and are far more beneficial for long term illness.

    They are just discussion points and this is a discussion board.
    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.
  • MortgageMammaMortgageMamma Forumite
    6.7K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    I think about a year back martin did an article on MPPI vs PHI. I think there were a few minor inaccuracies but you have to appreciate ML is not as qualified as an adviser and from memory he did respond well to constructive criticism. I am not blindly fighting MLs corner here, I think some of the things he promotes are fatally flawed and at times I have been quite worried about the ethics behind some of the suggestions. I've not actually read what ML says about CIC but based on whats being said here, advising people to not take CIC is a flawed suggestion if looked at in isolation. What I'd like to see if its not already covered is that Income Protection is considered primarily before CIC as a long term income in the event of illess is far more useful than a large CIC policy. I advise most clients to take this route and have a small contingency amount of CIC (say 10-20% of their mortgage balance or a minimum of £25k whichever is the greater) to provide for private medical treatment/time off work for dependants who are critically ill (childrens CIC) and perhaps essential adjustments to a car or property.
    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 would go along with many of the comments on here; it is cynical and, frankly, dishonourable to take up a broker's valuable time, obtain good advice, then go to an execution-only website for a cashback. The next logical step in that is to then sue the original broker if the advice turns out to be flawed! I am joking, but I have seen some awful examples of wanting something for nothing on this site.

    The other aspect is the view that it is not worth using a broker for protection and insurance advice. I am a really experienced mortgage and protection adviser and I STILL make mistakes. The general public do not know enough to negotiate products like Permanent Health Insurance and I have even seen them screw up on simple products like life cover (e.g. taking out decreasing term assurance to cover an interest-only mortgage).

    I do think that the public have to be careful when using brokers (not all are driven by the right motives), but at least there is some recourse if things go wrong. If anything, we are over-regulated or, at best, mis-regulated. :mad:
    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
    Some of your comments about protection are slightly off the original topic, but hey - who cares?

    I think that it's pretty obvious that 90% of the public don't understand the difference between most types of protection insurance, and that if people buy on a non-advised basis they are most often going to make a poor choice - not just failing to get the best value provider, but failing to buy the correct cover for their needs.

    Implying that advice is a bad thing - or, more to the point, that PAYING for that advice is a bad thing - is not helpful if the objective is to ensure that people get what they need at the best price - which is, after all, what MSE Martin's version of money-saving is meant to be about.

    Where I fall out with MSE in general is when its users (and to a lesser extent this includes MSE Martin) move from "getting what you need at the best price" to "screwing any provider of any goods or services you like".

    Things like Flightchecker and the like are very firmly in the first category - and a great asset to people genuinely trying to save money.

    Things like "steal money from Tesco by fraudulently using other people's receipts" (the subject of hundreds of posts on the forum) and "Sneakily get the best advice for free" (the subject of this thread) are very firmly in the second category, and do MSE, its supporters and its owner (MSE Martin himself) no service at all.

    It's a shame that the dividing line isn't more firmly drawn in the right place.
This discussion has been closed.
Latest MSE News and Guides