Which? said it believed there was a demand for the service, after its members gave feedback saying they did not know where to go to get impartial, trustworthy mortgage advice.
The FSA-regulated telephone-based service will launch later this month to Which?’s 750,000 active members, although Which? could not confirm an exact launch date or the number of advisers the service employed.
Advisers will be paid a salary and any commission will go back to Which? to fund the advice service, with any surplus going towards its general campaigning work.
The service will only advise on mortgages and customers who require further products, such as home insurance, will be referred to IFA database unbiased.co.uk.
However, Alan Lakey, principal at Highclere Financial advice, questioned the quality of the advice that will be available and the lack of cross-selling cover to customers.
Lakey said: “Its success will lie in the quality of advice being given and the danger is who is giving the advice and are they capable of doing so? There is far more to it than just using Trigold and looking for the best interest rate. The blunt truth is the salary will have to be very good to attract someone already in the market.
“In addition, what about ancillary services? It could be argued they are only going to be doing half the job.”
Nevertheless, Jonathan Cornell, head of communications at First Action Finance, said: “I think it’s a great move for Which?. Traditionally, it has been very good at reviewing products and giving impartial advice, but mortgage advice is much harder. It’s a brave move for them to intend to cover direct deals as well, because they are not getting paid for that and it could be a big issue if the customer decides to complain.”
He added: “If the service helps enhance the reputation of the advice market, then that will be good, and it will be fascinating to see how the staff perform without commission.”
Michael White, director of Email Mortgages, commented: “I’m surprised by the move, but not in a negative way, as I don’t think it will undermine the broker market. The interesting thing will be when Which? get a complaint, as will inevitably happen. That becomes very difficult to deal with in their situation, as how do you criticise others when you are in it yourself?
“However, this has to be good for the man in the street.”
The service will be available to Which?’s 750,000 paid up, active members along with their family and friends, who will be able to use the Which? members’ details to get advice without having to become a member themselves.
A typical Which? subscription offering a magazine and online access costs £9.75 a month.
