To discover how brokers value the advice they offer Mortgage Solutions spoke to a number of intermediaries to find out how much they charge and why.
Michael Lawlor, director of Integrity Wealth Management, said his firm charges £395 for residential applications and £495 for buy to lets for new clients.
“The reason for the charge is the amount of work that is required for processing a mortgage. It has substantially increased in recent years,” he said. “For existing clients we don’t charge a fee to reward them for coming back to us.”
Mossy Sowlat, director of AA Mortgage Gateway, said he charges a fee because he values his work.
“Yes of course I charge a fee and have done so since I started trading. I value my work unlike some other brokers who do not understand the concept of their business, as they rely on income generated from other businesses like protection, for example.”
“In my opinion, every piece of business written has its own value, therefore, should be charged accordingly,” added Sowlat. “We all know nothing comes free and we need to be clear that there is a charging structure. This will enable Mr Client to value the work received and maintain respect within the industry.
“All advisers should charge a fee.”
Principal owner of First Alliance Financial Services Waseem Herwitker also charges a fee – a flat fee of £550 for employed people, £750 for self-employed and complex cases start at £1,500. He charges 1% for bridging and commercial work.
Herwitker said he charges part of the fee upfront but he always makes sure he can place a case before he takes it on, so he completes background research before agreeing to it.
“I don’t think mortgage advice should be free,” he said. “My time is very valuable so I charge for it. Like with lawyers they are charging for their professional time regardless of whether they win a case. With fees there is also more onus on the adviser to be more professional. That’s the difference between a broker and an adviser.”