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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 3
    • maveli
    • By maveli 1st Dec 08, 1:00 PM
    • 573 Posts
    • 238 Thanks
    maveli
    Looks like the death threat really worked. Martin's update got 'GO TO BROKER' in every paragraphs.
    • MSE Martin
    • By MSE Martin 1st Dec 08, 2:13 PM
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    MSE Martin
    Hi Mortgage Man

    Thanks for your note above. I dont think my reply really fits the main piece so just a quick one.

    Most people I encounter don't think I'm an IFA. Its certainly a title I never use - nor to I ever use finance in my title (though some newspapers annoyingly call me a finance expert, even though I make it plain my trademark and he one to be used is Money Saving Expert).

    I always state when asked that Im a journalist. I suspect the limited numbers who think Im an IFA are those who dont know what an IFA is - sadly there's much ignorance - such as thinking an IFA will help with home phone bills or do debt counselling. Yet for me that's a wider issue - another one to take on.

    Most of the thinks people ask me in the street e.g. bank charges, ppi reclaiming, gas & elec, cheapest way to shop - are so far from being IFA issues. I am very plain about what I do, but your point is taken.

    The last thing in the world I would want is anyone to think Im an IFA. Im very proud of being a journalist.

    Martin
    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
    • MSE Martin
    • By MSE Martin 1st Dec 08, 2:16 PM
    • 8,116 Posts
    • 42,310 Thanks
    MSE Martin
    Looks like the death threat really worked. Martin's update got 'GO TO BROKER' in every paragraphs.
    Originally posted by maveli
    While I suspect this is tongue in cheek I dont find it that funny. In my career I've sadly received a number of death threats, some from far right extremists, a couple of bizarre ones, and now mortgage brokers.

    While I abhor far right extremists, I have always supported mortgage brokers. Your joke misses the point. I always have put GO TO BROKER. There is no change. The nasty people who've written these notes have risked hardening me away from brokers, as if there are that type of people in the industry do you really want anyone going to them. Yet I have always believe in the broker model and am trying to be bigger than that.

    Martin
    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
    • dunstonh
    • By dunstonh 1st Dec 08, 2:40 PM
    • 98,581 Posts
    • 67,058 Thanks
    dunstonh
    Thanks for the revisions Martin. These one post wonders and external idiots shouldnt reflect on the regulars here.

    Whilst we may not agree on some things (and often its just the finer points on an issue rather than the whole issue), the actions of these fools is disgraceful.

    I always state when asked that Im a journalist. I suspect the limited numbers who think Im an IFA are those who dont know what an IFA is - sadly there's much ignorance - such as thinking an IFA will help with home phone bills or do debt counselling. Yet for me that's a wider issue - another one to take on.
    I have seen you referred to as financial expert and advice from financial expert so its not unsurprising that perhaps some may make that leap to adviser.

    A lot of people dont understand what an IFA is. The FSA hasnt helped with its muddying of the waters over the years between advice classifications and its pandering to banks and salesforces. Research (i think it was from Which? last year showed that over half of those seeking advice from tied sales reps though they were seeing an IFA. Mortgage advisers and IFAs are another which are often mixed up.

    I have never had anyone come to me about phone bills or non financial matters. Though there was a post on this forum this morning from someone who couldnt undestand why the FOS wouldnt review their complaint about a Garden centre mis-selling a garden shed. - and it wasnt a joke.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Airwolf1
    Looks like the death threat really worked. Martin's update got 'GO TO BROKER' in every paragraphs.
    Originally posted by maveli
    Bad joke gone wrong, or just a warped sense of humour?

    If you received a death threat, and everyone made a [rubbish] joke over it, what would you say, in all seriousness?
    My suggestion and/or advice is my own and it is up to you if you follow it, please check the advice given before acting on it.
    • Conrad
    • By Conrad 1st Dec 08, 3:45 PM
    • 31,494 Posts
    • 55,821 Thanks
    Conrad
    The ability of some to excercise reasonable judgement is questionable, to say the least, hence the vitriol against Martin, comes form ignorance.

    Some brokers have an innate inability to collate and distill facts, which minds me of the sort of myopic bigotted utterences one finds with religious extremists.
    • maveli
    • By maveli 1st Dec 08, 4:34 PM
    • 573 Posts
    • 238 Thanks
    maveli
    Bad joke gone wrong, or just a warped sense of humour?

    If you received a death threat, and everyone made a [rubbish] joke over it, what would you say, in all seriousness?
    Originally posted by Airwolf1

    Sorry guys.. A death threat by a mortgage broker, I should have taken it very seriously.
    • payless
    • By payless 1st Dec 08, 4:57 PM
    • 6,607 Posts
    • 2,360 Thanks
    payless
    I have never had anyone come to me about phone bills or non financial matters.
    funny I have a few clients who always call me before booking a holiday - as they know "I'm upto speed with things like that" and its not unusual during a face to face appointment - if we talk about clients outgoings that we end discussing telephone / bb/ mobile / gas & elec costs ... in fact it would not be the first time someone said to me .. " you're a bit like that bloke on the telly ... you know the one balding one who talks fast and wears awful shirts"
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
    • MSE Martin
    • By MSE Martin 1st Dec 08, 6:52 PM
    • 8,116 Posts
    • 42,310 Thanks
    MSE Martin
    funny I have a few clients who always call me before booking a holiday - as they know "I'm upto speed with things like that" and its not unusual during a face to face appointment - if we talk about clients outgoings that we end discussing telephone / bb/ mobile / gas & elec costs ... in fact it would not be the first time someone said to me .. " you're a bit like that bloke on the telly ... you know the one balding one who talks fast and wears awful shirts"
    Originally posted by payless
    BALDING!!!!!!! - HOW DARE YOU!!!!!! ITS JUST TV LIGHTING!
    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
  • JF77
    funny I have a few clients who always call me before booking a holiday - as they know "I'm upto speed with things like that" and its not unusual during a face to face appointment - if we talk about clients outgoings that we end discussing telephone / bb/ mobile / gas & elec costs ... in fact it would not be the first time someone said to me .. " you're a bit like that bloke on the telly ... you know the one balding one who talks fast and wears awful shirts"
    Originally posted by payless

    Poor Martin! I love your shirts, they brighten up my day! and you are defo not bald. You do talk fast though. My hubby says there is finally someone else who can talk as fast as me.

    Nice to see some light hearted posts again.

    By the way, if you only want to quote part of someone's post how do you do that? I'm a bit blonde ha ha!
    Excited for Florida - May 2012
    • payless
    • By payless 1st Dec 08, 9:09 PM
    • 6,607 Posts
    • 2,360 Thanks
    payless
    BALDING!!!!!!! - HOW DARE YOU!!!!!! ITS JUST TV LIGHTING!
    Originally posted by MSE Martin
    Proves you are vain.. I was talking about Dom Littlewood
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
    • silvercar
    • By silvercar 1st Dec 08, 9:25 PM
    • 39,626 Posts
    • 163,776 Thanks
    silvercar
    By the way, if you only want to quote part of someone's post how do you do that? I'm a bit blonde ha ha!
    Originally posted by JF77
    Click on the quote button, then delete the part you don't want to repeat out of the message box.
    • dunstonh
    • By dunstonh 1st Dec 08, 9:30 PM
    • 98,581 Posts
    • 67,058 Thanks
    dunstonh
    By the way, if you only want to quote part of someone's post how do you do that? I'm a bit blonde ha ha!
    Or left click and drag your mouse over the text you want to copy and right click and select copy in the menu (or press ctrl C) then come back to the message box and right click and select paste (or ctrl V). Then select that bit of text and press the speech bubble above the message box (it says wrap quote tags... if you hover above it)

    That sounds a bit complicated but can be useful when you want to copy and paste a selection of quotes and answer sections at a time. Like this...

    Proves you are vain.. I was talking about Dom Littlewood
    I thought you meant Mini-me from Austin Powers.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • jamesd
    • By jamesd 2nd Dec 08, 9:46 AM
    • 23,514 Posts
    • 15,841 Thanks
    jamesd
    But you MUST be qualified AND regulated to offer "advice" on mortgages.
    Originally posted by minimike2
    It's not as simple as that.

    Recommending that a first-time buyer consider a fixed-rate mortgage (but without mention of a specific product provider) is not treated as regulated financial advice. However, recommending that a current mortgage holder switches to a fixed-rate mortgage (again without mention of a specific product provider) is regulated financial advice. (Thoresen Review of Generic Financial Advice, Annex 2 paragraph 5.4)

    But do note that that is in the context of individual advice in the course of a business activity. The product being left is the specific product from a specific provider when individual advice is being given.

    There's also the general situation that:

    "4.10 Deciding whether a person giving advice must be authorised by the FSA is determined by applying four tests:
    Is the provision of advice carried on in the UK?
    Is the advice given by way of business?
    Does the advice relate to a specified investment?
    Does the advice relate to a specified activity?
    4.11 All four tests must be met to require FSA authorisation.
    ."

    I've yet to see Martin fail to use careful wording to ensure that while his business clearly meets the first two tests, he won't meet both of the second pair.

    The result of this is that unregulated individuals, not acting in the course of a business, are entirely free to recommend specific products from specific providers, while professionals may well not be so free, particularly if they choose to be cautious. Pub and message board chats by consumers are entirely lawful and not subject to regulation (except for certain illegal activities relating to stock markets).

    Section 7 of the document may be more problematic for Martin, since his business collects commission (referral fees) for acts that could be taken to be introducing people to comparison web sites. I assume that he has obtained and follows individual legal or FSA advice on this subject. A consumer, not acting in the course of a business, would have no such concern. If Martin reads this I'd be interested in knowing the legal reasoning that ensures his business is safe, out of curiosity about the regulatory boundaries rather than any belief that anything improper is being done.
    • Den
    • By Den 3rd Dec 08, 12:10 AM
    • 420 Posts
    • 109 Thanks
    Den
    I don't want to be rude, but this post again another negative point for brokers. People should read and think, this site helps. I imagine that brokers are gutted that people can share information about deals and costs of products and fees they paid, using the Internet. So chances are MUCH LESS now that customers will be ripped off by brokers, and missold wrong products. Because of sites like this we can gain INFORMATION: mortgage cashback, whole market brokers, remortaging to get better deal.

    I think if you are good and run your business with honesty - you will get customers! But if a broker ripping it's customers for many years and now afraid of loosing a job, then maybe it's time to review the way to deal with customers.


    Huge THANKS to Martin, this site, it's members!!!

    Martin...
    you are missing the point totally, as a broker I get people ringing me up saying they want a certain type of mortgage because that money saving fellow recommended us to do it. These people think you are qualified to give advice, as you will be aware that to be giving mortgage advice or what can be seen as mortgage advice you have to be regulated by the FSA. I have taken time to write to the FSA about journalists talking about mortgages as I feel that after over 20 years in the industry I want to protect my industry and my client from bad advice. PLease remember Martin please look upto you and some are foolish enough to believe everything you say. 3-5 months ago you were 'advising' people to fixe their mortgage, fix thier gas bills !!!! now you are telling people to 'ditch the fix' ,.
    You should have a diclaimer stating that you are NOT qualified to give advice when you appear on the radio /tv.
    As Ive posted before Martin if you want to give advice get qualified and get regulated to give advice. Put you money where you mouth is
    Originally posted by arkie
    Have you got something to share - Do it.
    When you don't know - Ask.
    • Den
    • By Den 3rd Dec 08, 12:22 AM
    • 420 Posts
    • 109 Thanks
    Den
    I think therefore the message to everyone (which I'm sure Martin would agree) is DO YOUR RESEARCH. It never fails to surprise me how many of my clients trust me blindly with whatever I tell them - fortunately, I have never (and will never) abuse that trust, even if it means my business hitting the wall. But the temptation must be there for some brokers, in dire financial straits, with lower morals than me!
    Originally posted by Chez Guevara
    This is exactly what I tried to underline in my previous post. Some brokers use unprepared customers. It's so hard to find the one you trust.
    Have you got something to share - Do it.
    When you don't know - Ask.
  • ADoc
    Financial Advice
    May I please offer some views that may have been overlooked? Please note these are not advice! I am not registered to give investment advice

    SHOULD THIS WEBSITE BE GIVING EVEN DIRECTIONAL VIEWS ON WHAT TO DO?

    Legally, the website needs to beware, as regulations are not 100% clear. Telling people to buy something because it's a good deal can backfire. "Buy tech funds" is an obvious and fairly recent example, and even journalists have responsibilities in this regard.

    But hey if Martin can find some deals that people should be AWARE OF and CONSIDER, then that's useful. Of course it is. If he can find us a 1 DVD or a 99% savings account from LloydsTSB, then whoopee (though we should all consider the alternatives, because some aspects of the service may not suit us).

    TO FIX OR NOT TO FIX?
    My point concerns fixing gas tariffs or interest rates. Or buying stocks because they're "cheap". Or selling something because it's expensive. These are VIEWS on the financial markets that people are taking. And quite often these views might turn out in retrospect to be erroneous.

    Example: Mortgage fix

    If you take a fix you will find that the variable ends up lower some of the time. Conversely, if you take a variable, you might end up paying more. As I understand it, over time the fixed rate works out more expensive much of the time, but you get peace of mind. It's worth paying a high-ish rate if you really need certainty. BUT: you can't have it both ways. You can't get a fix that is always cheaper than a variable. So you locked in to 5% for 5 years and base rate goes to zero? Tough I'm afraid - but at least you can budget. Who knows? Base rate might be 20% in 2010...

    Things they don't often tell retail clients (these are related or even the same thing!)
    Retail clients are suckers
    Buy high sell low is not a good idea
    Financial markets drive product prices (if the fix is at 5%, it's at that level for a reason - ask the bank or IFA what the "wholesale swap" rates are, they should know)
    BUT
    Retail generally has an implicit "put option" (ie buying out of the contract if it's truly awful and leaving the provider with the headache)
    Life is too short to risk ruin - read Charles Mackay for good illustrations of how people have ruined themselves through the ages via speculation

    Readers of this website might do well to bear these maxims in mind.

    For what it's worth, my personal view on brokers is that they often gravitate to the best commission rather than the best deal for the customer. THERE! Scold me. Happy to listen and defend or change that position via debate.

    Thanks
  • Stonehouse
    Imporant note: I am a regulated mortgage broker, and the coments below do no constute any advise of anytype, but smply a personal view based on having read the diffrent comments in this thread.

    Dear Martin,

    Firsly I am sad and very disapointed on the threats that you have recieved- while being ashamed that mortgae brokes who should be workig towrds being profesionals in same category as solictors and accounants have managd to act like borred children.I also promie you that any competant mortgage broker will be too busy looking after their clients (especialy in curret climate) to be woried about the advise/guidence you have given on your site.

    Secondly may I comend you on your very informative, and useful website. I am a fan of your money saving tips. Well done to you and your team for this great work.

    Thirdly and lastly I disagree with allot of the commnts in this thread so I list below all my diffret points of clafication, and please I would be more than happy to be corrcted.

    1- It is a general problem that allot of so called experts on TV do not have any specific experience in the industry that they comment on. In my opinion it is not simply about a qualification, but the experience of having worked in that specific industry. For example an experience mortgage broker could have literally have advised 1000s of clients, and no exam can substitute that type of experience or insight.
    2- Whole of Market does not mean Independent. A whole of market broker can choose to deal with a limited number of lenders,and still present a whole of market proposition. An Independent broker has to offer a fee only option- along side any commission option, and in my personal opinion a truly independent broker should be able to refer a client to a lender that does not pay any commission- and in that case it is justified to charge a fee. In fact there are many nsances where a fee is justified depning on the work involved- as good added value advise from an experienced broker is underestmated.
    3- For example a local broker(not call centre based adviser) will have strong local property insight with contacts with many local profesionals to include surveyors and solicitors - who can be pivotal in any purchase. In relation to advise I am shocked at the amount of invidules that get dragged into focusing on the lowest rate- while in many instances if proper holistic advise is given- products such as offsets can be recommended to the right client that can result in savings of thousands of pounds.
    4- Also remember your bank adviser works for that bank- while your mortgage broker should have your interest as priority as they work on your behalf.
    5- Historically by using different clubs and mortgage networks brokers have also had buying power with lenders- which gave them access to some exclusive products, but also the potential depending on many factors of superior service levels. As the relationship with the banks and brokers is of a business to business natre- a good brokerage should also have instant access to industry developments,that can include securing products for cients before they get withdrawn.
    6- If your application is declined by your bank you will have to start shopping around again- while a competent broker should be able to place (if placeable) your deal with a different lender in a swifter manner.

    I am obviously biased as a mortgage broker, and can add much more to the above list as I strongly feel that the benefit of an experience mortgage broker is truly under estimated. To conclude I have had the pleasure in my career of working with some very experienced and competent advisers- and if you have had the pleasure of being serviced by them I promise you would agree with all my above points.

    All the best - and once again Martin thank you for this website.

    Tony
  • Chez Guevara
    I don't want to be rude, but this post again another negative point for brokers. People should read and think, this site helps. I imagine that brokers are gutted that people can share information about deals and costs of products and fees they paid, using the Internet.
    Originally posted by Den
    That depends on what sort of broker you are - if you're stinging your clients, then yes. If you're acting as a true broker - and by that I mean someone that gets you the best rate - then no.

    There's a massive difference between using a broker and going direct - when you apply direct with a lender, all employees of said lender will represent the bank. When you deal with a broker, the broker represents YOU.

    I can think of countless cases with my clients where I have been able to get them mortgages with lenders that they simply wouldn't have been able to get if they'd gone direct - because I know the criteria of the lender inside out and know how to present the case.

    Yes, plenty of clients could look into it and do it direct - but they come to me for about half an hour and that's pretty much all they have to do. I do the rest, right up to completion, even filling in their paperwork from the solicitors.

    My regular clients only have to choose their mortgage and sign the (pre filled-in) application forms. I make it very easy for them.

    So I have nothing to fear from the internet - in many ways, it only strengthens what I'm telling them, that the rate I'm offering is the best. Or I save them wasted time, effort and possibly money by telling them why the particular mortgage they've seen on the internet is not suitable for them. Why pay for a survey, if you know before you've started that a particular property will not be acceptable to the lender? Or why add more footprints on your credit file if you know the lender is going to say no?

    Yes, there are bad seeds in the industry, sadly. But there are some damn good people in it too.

    In life, as soon as you find a good builder, plumber, car mechanic - you hang onto that person for life, no matter what. I would add mortgage broker to that list.
  • thekaver
    all martin seems to talk about when talking about mortgage is the intrest rates!!!!

    n e borker like myself nows they is alot more to mortgages than just the rates, as they is fees, ect with variers mortgages

    A broker weights these up to get the best possible saving! this means the 1 with a slightly higher intrest rate but with less fees might actually have the best savings!

    HAVE YOU EVER HEARD OF MARTIN SPEAK LIKE THIS?????????

    ALSO FEE FREE BROKERS? IS THEY ANY OUT THEY THESE DAYS, CAUSE I KNOW I WOULDNT WORK FOR FREE!!!!!!
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