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  • FIRST POST
    • MSE Martin
    • By MSE Martin 29th Nov 08, 6:12 PM
    • 8,116Posts
    • 42,310Thanks
    MSE Martin
    An Open Letter To Mortgage Brokers.
    • #1
    • 29th Nov 08, 6:12 PM
    An Open Letter To Mortgage Brokers. 29th Nov 08 at 6:12 PM
    Dear Mortgage Brokers.

    It's come to my attention recently that there are a small number of brokers out there who see me as a figure of hate, in fact I've even had some brokers anonymously contact me to request I end my life.

    Of course thankfully there are many brokers who understand the work I do, and support it, and contribute to helping consumers on this site. Yet I'm concerned about the damage the minority may cause the majority.

    What I find most bizarre about this is I've spent my entire career being a supporter of the mortgage broker industry. I've lost count of the number of people who've approached me in the street and said "I got a great mortgage deal, by going to a broker as you suggested." or "I didn't go to my bank this time, I used a whole of market broker, because I wrote it down when you said to on the TV".

    Therefore to be attacked by a small segment of the broker industry seems strange. The banking sector, claims handlers, secured lenders... I'd be less surprised by, but the one advice sector I actively support and postively push people to go to?

    Cherry

    The focus of the venom seems to centre around the forums of a small website called Cherry, which even apparently has a board dedicated to me. I did once read what it said, yet many of the comments got so ridiculous, and libellous, it became no longer worth my time or energy to do so.

    One of the main problems with Cherry is that someone posts an inaccurate comment about what I've said, and then people wind each other up. Yet the info is usually completely erroneous.

    I suspect some of it is to do with the fact I turned down an invite to discuss things with brokers on the site.

    To be honest I get about 300 requests a week for similar things, and most, many much bigger institutions don't take umbridge when I turn them down. Yet as I said in my reply, I'm happy to engage with brokers here on this site which reaches many more people and, I suspect, brokers (and I hope this thread goes some way to do that). Though I'm not sure that was ever actually communicated.

    My view on brokers.

    So let me yet again, clarify my view on brokers. For the many years I've been doing this, whenever talking, broadcasting or writing about mortgages my constant push has been to say use a "whole of market" mortgage broker (well since the term came in anyway) to get you the best deal.

    Of course as this is MoneySavingExpert my agenda will be to do it fee-free if you can; though in recent tough times I've actually shifted my stance slightly as more brokers charge in tough times to be much less rigid on that push as getting good advice should be the primary focus.

    To those brokers who've made their minds up that I'm anti-broker based on what they've heard. Why not read what I actually say in the full guide to mortgage advice and judge the stance for yourself? The opening sets the scene pretty well...

    "Don’t trust bank or building societies' mortgage advice; they’ll just flog you a mortgage from their own limited range. Use this broker plus technique to get free advice on the best deal and possibly grab cashback too.

    First use a whole of market broker to find the right mortgage and use its clout to help you get accepted. Plus, as sadly some lenders have stopped brokers accessing their products due to the credit crunch, to ensure you get the very best deal, you now need to check some specific lenders yourself."

    Sadly in recent times the growth of direct deals has meant I've added a second stage of suggesting people check out the FSA's website AFTER going to a broker to check there are no deals being missed, then going back to the broker to discuss it - which enables the broker to weigh up the pros and cons of all deals with their client.

    While I know for brokers' pockets, it would be better if I didnt mention this, I'm sure all reasonable brokers will understand that my prime concern is to provide consumers with all the info and therefore this is something I need to do.

    However I know at the moment the lack of mortgage business coupled with direct deals is hurting mortgage brokers a lot and I suspect this is one of the reasons why anything that isn't a complete "just use a broker" comment may upset some in an industry that's been hit by poor economic time.

    For me lenders withdrawing deals from the broker market so they're only available direct is a retrograde step, and anti-consumer, something I've written about before here, and even broadcast about the issue on prime time ITV.

    What about cashback mortgage brokers?

    I know there's been some comment about the fact that I include the few cashback brokers in my guide. First of all I feel it's entirely appropriate to let people know about this option, that's what I do in all subjects.

    However the frustration and the hatred I've read about some of this, I suspect comes mostly from people who've never actually read what I say. This is from the guide and the font sizes used here are as in the article.

    "Yet remember this is ONLY for the very money savvy, who know and can identify exactly the right mortgage for themselves. Do remember...

    ...for most people, a broker’s weight on your side for 100,000s worth of mortgage transaction’s worth more than a few hundred quid cashback."

    In earlier incarnations of the guide (now quite a long time ago) I did include the option that people could go to a broker, get the info and then process it through one of these sites. [/b]

    After polite representation and legit argument from some brokers on this site, I changed my stance on that, as I agreed with the points made. It now says...

    "The more loophole savvy of you may have worked out that you could of course go to a fees-free broker (or even a fee broker as long as the fee isn’t paid until transaction), then process its recommendation via a cashback site. This is a balance of ethics and practicality."

    "By doing this you have taken the broker's time but not allowed it to be recompensed for the advice by gaining a fee. Overall, 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."

    And remember this is after an explanation of why keeping an advisory broker working through the process is worthwhile as the support is needed.

    I consider this to be a totally reasonable inclusion in the guide. Though it's something I don't think I've ever mentioned on TV or radio as in the much shorter time I'm given it's not worth prioritising.

    It's worth noting that our (admittedly very rough) figures show very substantially less than 0.1% of readers of the guide actually click through even to bother to look at the cashback sites.

    Should I change my stance?

    If I did, it would be to not suggest people use brokers. I don't believe that's appropriate, though sometimes after some of the venom, I get tempted for a second or two. I will continue to support the broker sector.

    I don't know what impact I've had on the market place, but as much of the complaints are that I'm too influential, if that's true, there will be many 100,000s who've gone to brokers because I've said to.

    Someone not qualified shouldn't talk about mortgages.

    This is one of the complaints I find, frankly, risible. To suggest only mortgage brokers can write or talk about mortgages is bizarre. It would seem that mortgages should thus never be on TV, radio, web or in newspapers in that case.

    Of course I'm not a qualified mortgage broker. My entire stance is that I write NOT as part of the finance industry. I am a journalist (a qualified one at that) and that's my work.

    Yet there is a difference between talking about the issues happening, the trends and extolling people to act (rather than how to act) and telling people what to do. I have an enormous mailbag, many thousands of emails a week, and concern over the mortgage is one of them.

    So while I think it's well worth while warning people to "check they're not overpaying" and that "pundits predict the end of cheap fixed" and explain how mortgages work. I ALWAYS refer people to mortgage brokers to look at someone's specific situation. This is the great contradiction.

    Brokers are doing themselves no favours.

    Having said all that, I want to make it plain that some of the nasty attacks that I've seen recently, do the broker industry no credit and I would hate the behaviour of a few to discredit that of the many.

    I am also saddened at the very few number of brokers who've come here, to make unfounded derogatory comments, in all areas, and risk ruining the work this site does to help many people.

    Many of these bring the broker industry in to disrepute and sully the reputation, the last thing that is needed at the moment. In one thread where a mortgage broker tried to discourage others from helping people here, (s)he was roundly lambasted by members of the pubic and sadly was another bad notch.

    Again I suspect that's because the premise started by saying this site recommends people to go it alone or through comparison services - which actually is the opposite of what I write. The shame for me is these comments are made based on such erroneous statement; I don't understand why they're written.

    To conclude. I intend to continue to do what I do. To continue to suggest people use whole of market brokers. And to continue to ignore some of the ill-founded and ignorant comments I've read, but respond and react to those trying to make constructive points that will help consumers.

    It is my hope that this open letter clears the air, and (yet again) clarifies my stance. It's my hope that most reasonable brokers will see we're all on the same side in helping consumers get the best deal.

    Kind regards

    Martin Lewis

    PS Please feel free to link to this thread from other arenas that brokers will see.

    PPS This is a first draft and needs some proofing which I will come back and do later. I will also respond to any further points raised in this rather than below.


    1st Update. 11.30am Mon 1 Dec 2008

    Thank you for all the feedback. I just wanted to make clear that the vast majority of brokers on this forum have always been polite and helpful. In fact when I redrafted the latest version of my mortgage broker guide I came here for feedback before it was published and there were many helpful tweaks because of the brokers.

    Now to answer specific questions.

    "First you advised people to fix, now you're advising people to ditch their fix"

    This seems to be something many brokers who seem to have come from the Cherry site are saying. I find this confusing, as I've never a. Advised anyone. b. Written people should fix. c. Written they shouldn't fix.

    This is one of those "please actually read what I wrote, or listen to what I said rather than what you've been told I said, scenarios."

    A. Advice. This site doesn't give advice, it gives information. It never mentions specific mortgages and always directs people TO MORTGAGE BROKERs.
    B. Telling people to fix. The nearest this site has got is to say "if you're going to fix imminently, fixed rates are rising so act quickly" that's not the same as saying FIX your mortgage. It's an urge to sort it soon - again DIRECTED TO A BROKER and never about a specific product.
    C. Ditch your fix. Again I certainly thing that'd be wrong for the vast majority of people. Yet it's what everyone's asking, so I produced a checklist and told people in the rare circumstances where it may add up - to GO TO A BROKER. You can read exactly what was published here (top left of this). But here are a few highlights...

    i. It was titled "Fixed mortgage? Can you ditch & switch to a low rate deal?" note the question marks.
    ii. Then having explained that some on variable rates would gain it says "Ditch your fix checklist! By definition, those on fixed-rates haven’t gained. Many are asking whether ditching & switching, even with a penalty, will save you cash. Here's the checklist:"
    iii. Then after the checklist it says "How to find out: If the checklist makes a ditch, switch & save look possible, contact a whole of market broker to do some detailed comparison numbers, incl. switching fees. Most reputable brokers won’t charge you unless you actually end up getting a new deal through them."

    I'm not quite sure how anyone can see that as a call to ditch your fix... but there we go.
    Last edited by Former MSE Andrea; 02-12-2008 at 10:53 AM.
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.

    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.

    Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 000
Page 9
  • feisty1
    Hmmm, excuse me, "snide attempted dig"

    Quote "it takes the cherry doesn't it!"

    Pot, kettle comes to mind................
  • eightball
    This is something that worries me too... which is why I've both made representaions to the FSA about it, done it in broadcast and indeed even on prime time ITV - talked about the problem of lenders not allowing brokers to access deals (yet even with that, i still received broker complaints on that particular programme - can you believe it - it takes the cherry doesn't it!)

    Yet sadly I haven't seen any movement on it. And it the damage to the broker sector being done by both that and the obvious massive decline in mortgage approvals, and lower required LTVs required to remortgage is a real worry to the sector and for consumers.
    Originally posted by MSE Martin

    I think a lot of this has to do with you being seen as a GURU by most, as average jo has NO idea about financial workings and what you say gets passed as being advice as like bank "advisers" 95% of bank advisers cannot advise but the client is left thinking they have been advised
    Dont get me wrong its no fault of your own you have obviously worked very hard to get where you are and good on you, I bet even if you plastered over your face "do not take my advice" while you presented a high percentage still would!! its just simply people just dont understand financial issues and why would they its not taught at school so who do you turn to the broker .....when there was a lot of endowment misselling.......the bank......that only has 3 mortgages...........the ifa .......that stitched my mate up.........or martin he seems to know what hes talking about its that or my mate well he got a good deal and it worked for him

    All i will say is if you are a client and feel comfortable to do it your self do it! if not then take martins ideas (not advice ) to your/a independant broker and ask him does this suit my needs a good adviser will tell you if it does or doesnt but he/she will also tell you why it is best or why it doesnt work best for you and if you still not happy walk away ITS MOST LIKLEY TO BE THE LARGEST FINANCIAL TRANSACTION YOU WILL EVER ENTER INTO , MOST PEOPLE SPEND MORE TIME BOOKING THEIR HOLIDAY THEN SORTING OUT THERE MORTGAGE........SIMPLY MORTGAGES ARE BORING AND THEY DONT FULLY UNDERSTAND IT...........YET A HOLIDAY IS 3000 AND A MORTGAGE 150,000
    I am a Mortgage adviser AdvCeMAP,CeCM,CeRCC,CeRER
    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.
  • TonyMason
    I have been an independant mortgage broker for 20 years. I have dedicated my professional life to it. I have studied hard to get the FPC and CEMAP qualifications. I have dedicated my career to being as good as I can and giving the best possible advice and getting the best possible rate for my clients.

    I have never in 20 years placed a mortgage with a lender as it pays a higher fee. I also have not charged my clients a broker fee.

    My income in the last 18 months has gone down over 60%. I have decided reluctantly and after the hardest fight of my life for nearly 2 years to survive to throw the towel in and leave the industry.

    The mortgage broker has been affected more than any other profession in the housing buying process and more than any industry in the UK. It is never reported on however. We are the forgotten industry left to hang. The FSA do not give a damn about mortgage brokers, in fact they would love there to be no industry left as its less work for them. The Council of mortgage brokers, don't make me laugh, they have done nothing to speak up for the broker.

    The lenders who happily accepted our clients, yes our clients, for the last 10 years helping them make huge profits have collectively done their level best to destroy the broker market and you know what, they have suceeded.

    The broker has nothing in his weaponry anymore. There is no new mortgage market as the housing market has been dead for 2 years. They cannot get the best deals as all the lenders dual price which means clients can get a better deal if they go direct. The direct lenders like HSBC do not use brokers anyway and they have all the best deals.

    Lenders dual price also when the clients deal comes to an end of their rate offering better rates direct again. The final nail in the coffin has been the total death of the re mortgage market. I have had 50 or so clients in the last 6 months who have just stayed on their lenders svr as it is lower than any re mortgage rate.

    Even if there were better re mortgage rates however, the fact lenders still basically do not lend over 75% still and 60% to get the best deals and the 25% price fall in the last 2 years means very few people have a 25% equity anymore so they are forced to stay with their lender.

    Lenders are not lending and there is no market over 75% nearly 8 months after the bail out. The housing and mortgage market will only get close to normal when we get 90% or 95% deals across the board and reasonable rates.

    That may happen but probably not before 2011. That is too late for me and most brokers. The level of brokers has fallen from 30000 to 18000 in the last year and will fall below 10000 by the end of 2010.

    People will then have to go direct to their bank and get no choice and a hard sell on the insurance products.

    Thats the implications. The FSA do not give a damn. The lenders want that.

    I believe my leaving and others like me is a huge loss to the industry but I am past the point of caring now.
  • TonyMason
    Martin

    I refer to your comment on the other thread.

    The broking industry is all but dead now. Those people whose livelihoods have been destroyed meaning often the loss of their homes, family and health is a massive traumatic experience. People will lash out. Although I do not condone the comments on the Cherry site, which i have not read I can understand them.

    You see as we are mortgage brokers we are the forgotten industry. I have never once in the last year seen anything in the papers, on the tv or on the radio about the 40% and counting destruction of the industry.

    As we are just " suits " and work in finance we are left to hang and no one cares. Our industry is destroyed like the mining industry in the 80's but I have yet to see the UK public taking to the streets in London on a march for brokers or indeed expect to see a film with Ewan McGregor playing a hard up mortgage broker anytime soon.

    Please Martin do not try and make out now you are a bastion for mortgage brokers. You have helped to destroy the brokers income. Yes you have told people to go to brokers but basically to use them and do it yourself or ask for some of the proc fee back. You have told people not to use brokers who charge fees regardless of service, told them to go direct and told them to ask for money back. So please do not come on now pretending you did not as it does not wash.

    Basically you want brokers to help but be paid no money for it.

    You, the FSA and the lenders will be responsible for the total destruction of the broker industry and the outcome of people having to go to their banks , be sold their products only and be hard sold expensive insurance products. well done I hope you feel proud.

    Also getting childish and throwing your toys out of the pram because people have been nasty and insinuating you will not tell people to use brokers is very childish and fly's in the face of your supposed impartiality.

    Anyway its all irrelevant now.

    A dedicated and honest ( about to be ex ) mortgage broker of 20 years.
    • Gorgeous George
    • By Gorgeous George 30th Jun 09, 10:18 AM
    • 7,797 Posts
    • 8,484 Thanks
    Gorgeous George
    I think a lot of this has to do with you being seen as a GURU by most, as average jo has NO idea about financial workings and what you say gets passed as being advice as like bank "advisers" 95% of bank advisers cannot advise but the client is left thinking they have been advised
    Originally posted by eightball
    That may be part of the problem. Another part is that many average joes/joannas have been poorly advised by professional advisers of one kind or another.

    Whether it's a financial adviser at a bank (or salesman as I like to call them), an IFA or the spotty kid in Comet, advisers are often seen as modern day soothsayers. The truth is, nobody knows what the future holds but financial advisers' fear of our compensation culture means that they are more concerned about providing advice that is 'ok' and auditable rather than most likely to be right.

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • harryhound
    People will have to go direct to their bank and get no choice and a hard sell on the insurance products.

    That's the implications. The FSA do not give a damn. The lenders want that.

    I believe my leaving and others like me is a huge loss to the industry but I am past the point of caring now.
    Originally posted by TonyMason
    I wonder if the Travel Agency and the Car Insurance brokers agree with you.
    However I bet everyone who has flown with Ryan Air and Insured with Direct Line in the last 20 years does not?
    This internet technology has been a powerful force in pushing down prices and streamlining commerce; meanwhile the bloke with the little shop in the high street has been put out of business by crippling rents and council tax..
    • Conrad
    • By Conrad 1st Jul 09, 1:42 PM
    • 31,494 Posts
    • 55,821 Thanks
    Conrad
    I've long derided the broker community, for the simple truth is there was an endemic sales culture under pinning everything.

    Those neave comments along the lines ' I'm not a saleman, I just love helping people' are utterly misleading. Such claimants will know full well thier focus in every interaction is to generate income. Every work meeting they have ever attended has had a strong sales message running through it.

    I for one am very glad the industry is shrinking as it is my sincere hope that the shiny suited, BMW loving salesmen are driven out.

    Even now I hear of the salemen encouraging 2 year deals, merely so they get another sales opportunity regularly.

    Then we get those wonderful 'free tribes'. There is nothing free about them. I know as I used to wrok for one. Thwe major focus is to bring about protection sales - those are the numbers these people walk around with in thier heads.

    It's no wonder the public hold us in low esteem - we invite them in with the 'free advice' banner, and then do our level best to sell them insurance, when most clients will realise they can get it cheaper online or from Tescos or an IFA.

    My mental image of these declining sales people is of a chain smoking, soverign ring wearing, disinterested in economics saleperson - yet claiming thier knowledge is so vital to assist in that huge life time commitment!! The irony, oh the irony.

    Now, having said all this, there is another tribe in the broker community. Quiet self assured purposefull individuals that are happy to simply do as the client requires, without resorting to grubby protection selling (yes, yes I know protection can be important but that does not mean a saleman has to be involved in the food chain).

    I do not advertise a 'free service' as I firmly believe this to be a disingenous claim. If the client requires my commitment, I usualy expect them to prove thier commitment to me with an up front fee. ALL OTHER PROFESSIONALS ACT THIS WAY. Can you imagine expecting your architect to work on commision based on the building products he flogged you!!
    • Conrad
    • By Conrad 1st Jul 09, 1:51 PM
    • 31,494 Posts
    • 55,821 Thanks
    Conrad

    meanwhile the bloke with the little shop in the high street has been put out of business by crippling rents and council tax.

    .
    Originally posted by harryhound

    I'm that little bloke in the high street, but am fairly busy as people simply cant have a grown up conversation with many Banks and certainly not get what they need on the net.

    There is always a place for dedicated knowledgable local people.
    Remember I mjeet with lender reps and gain insights that would never turn up in or be translatable to any moneysupermarket search vehicle or call centre.

    For a start the heads of those firms aren't broking with real people day to day, face to face, so they wouldn't have the slightest idea of the needs of a great many complex individuals. !!!! in = !!!! out.
    • sarahemmm
    • By sarahemmm 1st Jul 09, 4:38 PM
    • 105 Posts
    • 90 Thanks
    sarahemmm
    Really sorry to hear your pain, Tony. Sadly, people like me, who do think carefully and use a broker, are in as much pain. We will suffer too, because when we are in a position to re/mortgage, our options will be that much more limited. If you can find any way to ride out the storm, I think you will find clients are there for you as soon as they are able to make a move.

    FWIW, I've just watched one of my neighbours sell at 40,000 below her original asking price - that's pain!
  • harryhound
    ALL OTHER PROFESSIONALS ACT THIS WAY. Can you imagine expecting your architect to work on commision based on the building products he flogged you!!

    I thought architects got a percentage of the cost of the building they create. I've just asked a solicitor for a guestimate of the cost of conveyancing only to be asked as question one what the value of my sale is; don't see how that effects the amount of work to be done.
  • TonyMason
    I've long derided the broker community, for the simple truth is there was an endemic sales culture under pinning everything.

    Those neave comments along the lines ' I'm not a saleman, I just love helping people' are utterly misleading. Such claimants will know full well thier focus in every interaction is to generate income. Every work meeting they have ever attended has had a strong sales message running through it.

    I for one am very glad the industry is shrinking as it is my sincere hope that the shiny suited, BMW loving salesmen are driven out.

    Even now I hear of the salemen encouraging 2 year deals, merely so they get another sales opportunity regularly.

    Even now I hear of the salemen encouraging 2 year deals, merely so they get another sales opportunity regularly.

    It's no wonder the public hold us in low esteem - we invite them in with the 'free advice' banner, and then do our level best to sell them insurance, when most clients will realise they can get it cheaper online or from Tescos or an IFA.

    My mental image of these declining sales people is of a chain smoking, soverign ring wearing, disinterested in economics saleperson - yet claiming thier knowledge is so vital to assist in that huge life time commitment!! The irony, oh the irony.

    Now, having said all this, there is another tribe in the broker community. Quiet self assured purposefull individuals that are happy to simply do as the client requires, without resorting to grubby protection selling (yes, yes I know protection can be important but that does not mean a saleman has to be involved in the food chain).

    I do not advertise a 'free service' as I firmly believe this to be a disingenous claim. If the client requires my commitment, I usualy expect them to prove thier commitment to me with an up front fee. ALL OTHER PROFESSIONALS ACT THIS WAY. Can you imagine expecting your architect to work on commision based on the building products he flogged you!!
    Originally posted by Conrad
    My oh my that chip on your shoulder is more like a sack of potatoes. Are your comments meant to be taken seriously. Lets look at them.

    1.
    I've long derided the broker community, for the simple truth is there was an endemic sales culture under pinning everything. = probably but most likely in the banks where all clients will have to go to now.

    2. Those neave comments along the lines ' I'm not a saleman, I just love helping people' are utterly misleading. Such claimants will know full well thier focus in every interaction is to generate income. Every work meeting they have ever attended has had a strong sales message running through it. - I do actually love helping people but I also have ambition to earn a decent living if I am dedicated to my profession and I do not see why I should apologise to you or anyone else for that.

    3. I for one am very glad the industry is shrinking as it is my sincere hope that the shiny suited, BMW loving salesmen are driven out - that says a lot more about you than the industry I think.

    4. Even now I hear of the salemen encouraging 2 year deals, merely so they get another sales opportunity regularly. - absolute rubbish. I have been recommending 3-5 year deals all year but no one is taking them as the svr is ( presently ) lower. No deal in 2 years is guaranteed with a non existant re mortgage market, direct deals and dual pricing, ignorance on your part is no excuse for being stupid.

    5. It's no wonder the public hold us in low esteem - we invite them in with the 'free advice' banner, and then do our level best to sell them insurance, when most clients will realise they can get it cheaper online or from Tescos or an IFA. - under FSA guidelines we have to recommend protection products and have you heard cheapest in often not best.

    6. My mental image of these declining sales people is of a chain smoking, soverign ring wearing, disinterested in economics saleperson - yet claiming thier knowledge is so vital to assist in that huge life time commitment!! The irony, oh the irony. - that again says more about you than the industry, no doubt you are perfect in every way possible.

    7. Now, having said all this, there is another tribe in the broker community. Quiet self assured purposefull individuals that are happy to simply do as the client requires, without resorting to grubby protection selling (yes, yes I know protection can be important but that does not mean a saleman has to be involved in the food chain).

    I do not advertise a 'free service' as I firmly believe this to be a disingenous claim. If the client requires my commitment, I usualy expect them to prove thier commitment to me with an up front fee. ALL OTHER PROFESSIONALS ACT THIS WAY. Can you imagine expecting your architect to work on commision based on the building products he flogged you!!
    Originally posted by Conrad
    - no doubt people use you due to your humility. They pay you a fee to tell them to go direct to HSBC. Good for you.
  • sims22
    "I've just asked a solicitor for a guestimate of the cost of conveyancing only to be asked as question one what the value of my sale is; don't see how that effects the amount of work to be done."


    The solicitors liability increases with the value of the property and so they charge a higher fee.
  • harryhound
    But what proportion of his costs is professional indemnity insurance ?
    I would like to think something like 0.5%
  • RufusA
    Even now I hear of the salemen encouraging 2 year deals, merely so they get another sales opportunity regularly.
    Originally posted by Conrad
    I wouldn't necessarily dismiss all "2 year deals" as bad advice.

    For example if you believed that BoE would remain low over the medium term, then a short fixed mortgage with say the Woolwich could be a cheap way of buying in to < BoE + 2% tracker.

    Rufus.
  • TonyMason
    Of course Rufus you are right but Conrad obviously knows better.

    I am pleased to report I have a 2nd interview for a sales and marketing job. It is using the skills I have built up over 20 years in face to face meetings to sell products and services of major companies. Nothing to do with mortgages !.

    I have finally given up. The problem is the destruction of my industry has at the start seen the cowboys and people in for a quick buck leave but now very experience , very good and very honest mortgage brokers are leaving in droves.

    If the mortgage market gets better these people, including me, may come back into the industry but I feel if they have a new career and are doing well which I am sure they will, they will not want to come back into an industry where they are valued as much as a bit of dirt on the underside of your shoe. The fsa, the lenders, journalists, hell even fellow brokers like Conrad regard us all as the Satan's Spawn so why work in that environment ?.

    The mortgage broking industry's loss will be another industry's gain from my and many other good, skilled , decent brokers enforced change of career.
    • HelpWhereIcan
    • By HelpWhereIcan 4th Jul 09, 10:23 AM
    • 1,228 Posts
    • 1,282 Thanks
    HelpWhereIcan
    Conrad has his faults but I have come to see past his sometimes clumsy way of getting a point over and behind to the often valid point.

    They have been too many brokers. Too many of them came off the street, took an "intensive" one week CeMap course and joined a sales organisation where volume was all that mattered.

    Those brokers never learned the difference between sales and advice, very rarely took an interest in the wider economy and the implications for themselves let alone their clients (I remember one looking at me like I was a nutter when I talked about Basel I and II).

    Working for some of the large salesforces they concentrated on 2 year deals, adding MPPI and a bit of level term. They did not have the training that taught them how to advise on protection properly etc etc. I really could go on.

    A friend of mine sounded me out about joining him recruiting mortgage brokers and teaching them some of the skills that those of us who have been in the Financial Advice industry for a while consider as basics i.e proper factfinding, goal setting, solution design etc.

    The idea being that the best of them (with further training and over time) could become IFAs with the rest remaining as mortgage specialists. Listening to some of the horror stories he has told me about how basic some of these peoples' skills and knowledge is, I find myself agreeing more and more with Conrad (God forgive me).

    The shiny suited salesman is still there (it is not always the most honest that has the deepest pockets) and the honest adviser is under immense pressure and everyday faces giving advice that will earn them nothing... because it's best for the client.

    Those of us who can apply a wider knowledge and skillset can try and get through without resorting to referrals to debt management or claims companies. However the fact is we have to change the way we work and look to the future of fees only based advice.

    The RDR is aimed at everyone (not just the IFAs amongst us) - commission will be dead before long and the consumer will lose out in the mortgage market because of it.

    It means that many people (who are not willing to pay a fee for advice) will not receive independent advice on a range of subjects from mortgages to pensions and investments.

    Those people will be left to the mercy of the sales forces within the banks, internet brokers/comparison sites and the major insurers who will offer a 'free' service but not one that is independent. Ask any IFA about the steps Norwich Union/aviva is taking to lay the groundwork for direct sales to consumers.

    IFAs will be charging fees because the RDR says so. Mortgage brokers will charge a fee because the RDR will cross over and that is the fairest way to do it. However, that means that most people with a simple need will not need/want to use a broker. They will need to DIY and be aware of the pitfalls of the sales and marketing practices within the banks and comparison sites.

    The mortgage broker must therefore become a specialist again. More than likely a specialist within a fee charging IFA practice charging a fee to more complex clients.

    So I agree with Conrad's opinion of some within our industry, I agree that many don't have the skills needed to advise on protection properly.

    However, I also agree that the currrent climate has seen the end of some good people and more good people are going to go. This has done nothing but push them towards the banks etc where people have never had the best service, advice or fairest treatment.
    I am an IFA (and boss o' t'swings idst)
    You should note that this site doesn't check my status as an IFA, 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.
    • payless
    • By payless 5th Jul 09, 3:20 PM
    • 6,608 Posts
    • 2,361 Thanks
    payless
    Good post

    only thing I would add is that there is a big difference between the fees that a ( lets say fair) broker will charge, and the rip off merchants...

    even Martin's articles don't throw good light on " fair" fee chargers - ie the ones who might charge just a small amount on top of commission , or those that charge a (fair) fee but then rebate commission.

    We need to offer aprofessional service at a fair price- but on a basis that means we can stay in business

    For example - a menu based fee that if results in a commission product being completed works may work less than the commission rebated , whilst still giving consumers research on direct deals ( but as not processing required a smaller fee levied in those cases- again offset by any insurance commission)
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
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