It’s not for nothing that financial advisers have earned a negative reputation, sitting way down the popularity table ‘ somewhere between estate agents and tabloid journalists. In 2002, those serious about our sector’s professionalism should do some pro-active work to rescue that all important reputation.
Not too long ago, a silver-tongued salesperson could leave used car sales one day and become a mortgage adviser the next. Buckets full of cash were to be made and no industry barriers to entry existed. The combination was lethal. Thankfully, the fitness and propriety checks by MCCB and the new training and competency regime are now creating a de facto barrier to entry. Meanwhile, there are still some questionable tactics in the market.
Take our client Colin Hall, looking for a simple remortgage. A model client without a trace of adverse circumstances or complex requirements. Unfortunately, he stumbled into a brokerage which operated a sharp, direct sales regime. The shady adviser recommended a mediocre product, barely better than the client’s existing deal. Worse still, they charged a ‘loaded’ valuation fee, an up-front arrangement fee, as well as a completion fee. The broker’s fees alone equated to a whopping 2.1% of the loan. Luckily, the client resisted pressure to sign and instead found himself an honourable broker. His plight was the subject of a story in the national press last week and, while the story may have been a little sensational, it alerted millions of other consumers.
Instead of sighing over the press stories which highlight mortgage advice scandals, our real focus should be on encouraging a name-and-shame culture, to rid our industry of unscrupulous advisers as hastily as possible.
Many of us would normally scowl at the journalist and take an apathetic view of an offending broker. I urge you to take a new pro-active approach. When you discover a broker overcharging, misleading or pressuring clients, blow the whistle. Contact the relevant regulator, perhaps the FSA, MCCB or OFT. And, if you have clear facts, contact the press. Consumers will be alerted, the industry will rid itself of bad apples and our public reputation will be enhanced no end.