Colin Payne (pictured), associate director of Chapelgate, set up the fixed-fee HNW service for borrowers looking for loans in excess of £1m.
The common fee structure, said Payne, was for brokers to charge wealthy clients a percentage such as 0.75 to one per cent of the mortgage which he believes is excessive.
As part of the HNW proposition, Payne has set up Chapelgate Private Finance Concierge.
The concierge service is a network of chartered financial planners, foreign exchange specialists, solicitors, tax advisers and surveyors vetted by Chapelgate, that it can recommend to its clients.
The firm has also taken a specialist protection consultant who can negotiate rates with insurers for concierge clients.
Firms with same ethos
“Most of our clients came to us as young professionals and have now become successful in their careers, have more wealth and want to buy more expensive properties that require larger loans,” said Payne.
“We wanted to be able to provide a service that did not just focus on the mortgage advance. We realised we could offer our clients more value and increase our revenues by recommending approved experts across a range of services and that’s where the word concierge came from.”
Payne said he had chosen to work with firms that had the same ‘ethos’ as Chapelgate which was to respond to clients’ requests quickly.
He added: “Each firm in our concierge service is trustworthy and diligent.”
For Chapelgate’s standard loan size mortgage service, borrowers pay £495. The firm wanted to use the same flat structure for its HNW clients.
Borrowers pay £495 for loans up to £2m, £1,995 for loans between £2m and £4m, £2,995 for loans between £4m and £5m and above £5m the fee is negotiable.
Payne said: “A lot of brokers charge up to one per cent which can equate to £15,000 for arranging a £1.5m mortgage.
“We think the flat fee structure and the commission we receive from the lender compensates us well so we decided to continue that philosophy for our HNW clients.”