Despite its humble beginnings with just three brokers, Which? has a potentially massive reach with 750,000 active members. It intends to exclusively market its free advice service to members and their friends and family, backed by its reputation as an unbiased consumer body.

To underline this stance, Which? declared its brokers would receive a salary rather than commission, with any commission received from lenders going to fund the service.

Yet, the mortgage industry’s reaction to the news of a Which? mortgage service ranged from welcoming to hostility, with a volley of questions fired. For example, how would a consumer champion manage potential complaints? – and how does offering a salary not a commission payment lead to better quality advice?

Nevertheless, as it approaches its first three months in operation, Which? Mortgage Advisers director Chris Gardner believes that it can prove the naysayers wrong.

Gardner said: “Which? has always been active in giving general money advice and the service is an extension of what we’ve done. Yes, mortgage advice is regulated and very different to what we’ve done before, but it is a natural step when we want to help our customers as much as we can.”

Sponsored

Your First Home: confidence to build

Sponsored by Halifax Intermediaries

Gardner said he fully anticipates that Which? will mystery shop its own mortgage advice alongside other firms and publish the findings in full.

He said: “Obviously, I will not be involved in the process at all. Our reputation is based on unbiased reports and so to be completely forthcoming is vital.”

The Which? mortgage advice service has got off to a strong start and will exceed its initial targets, Gardner revealed. It has been so encouraged by its members’ positive feedback and the level of referrals it has received that it is accelerating its recruitment of advisers to double its team.

Of course, the Which? mortgage service launched with just three advisers and a case handler – a deliberately small team as the company waited to see how popular the service would prove among members.

Clearly, it could take some time before Which? troubles the big names of the mortgage broking world and David Hollingworth, head of communications at London & Country, believes the negative reaction that greeted Which? from certain parts of the broking industry stems largely from its past criticism of the financial advice industry.

He said: “The Which? reports on financial services were, in general, very critical, particularly of the advice service, although not necessarily mortgages. I think advisers saw the launch of the mortgage advice service as hypocritical.”

Yet, David Sheppard, managing director of Perception Finance, said the industry’s highly critical reaction probably came from the ongoing concern that lenders want to move away from proc fees.

“I think brokers are worried that lenders may look at the Which? salaried service, say it’s working and so get rid of proc fees. However, I don’t think that will happen. There will always be a demand for reasonably costed advice and it would take a brave regulator to get rid of proc fees.”

Gardner admits that not paying its advisers by commission is culturally different, but it is a vital component of maintaining the firm’s integrity and something that its advisers have to be comfortable with.

He says: “We are very happy with the quality of our advisers and excited by the people coming to us in recruitment.

“If paying a salary was to become an impediment in attracting quality advisers, we’d stop.”

As for complaints, Gardner is under no illusion that Which? will get them and that its handling of those consumers could make or break the service.

Yet, with Which? already occasionally dealing with complaints from its legal service, Gardner does not believe a mortgage complaint could undermine the brand if dealt with professionally.

Certainly, its reputation will mean that some of its detractors will be waiting to point fingers. Hollingworth said: “Some feel that Which? is holier than thou and are waiting for the moment it gets a complaint. But in reality, consumers will complain and Which? will investigate like any other brokerage.”

Yet, for all the questions surrounding Which?’s move into the mortgage advice market, surely it can only be taken as a positive that such a high profile brand believes the need for advice is such that it is prepared to set up a brokerage.

“The Which? service gives a rubber stamp of approval to mortgage advice. It clearly thinks that it is a good thing and that message will be got by the consumer,” said Hollingworth.