According to a Freedom of Information Request sent to the Financial Conduct Authority (FCA) by this publication, the proportion of brokers charging £1-499 in fees rose from around 22% in 2023 to around 29% in 2024.
This covers all regulated mortgages sold via the intermediary channel and includes second charge and lifetime mortgages.
Brokers charging this fee were the second-largest segment, with brokers charging no fee staying stable at around 55% in 2024. This comes after a trend of growth over the past few years.
Looking at other segments, around 11% of brokers charged £500-999, with around 2% charging £1,000-1,499 and the same proportion charging £2,000 or more. Only 1% charged £1,500-1,999 in fees.
| Intermediary of third-party fees | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| £0 | 42.53% | 44.24% | 49.5% | 51.81% | 55.96% | 55.01% |
| £1-499 | 38.1% | 37.32% | 33.88% | 30.07% | 22.36% | 28.75% |
| £500-999 | 11.1% | 11.6% | 11.5% | 11.08% | 10.33% | 11.09% |
| £1,000-1,499 | 2.51% | 2.16% | 1.67% | 1.73% | 1.53% | 1.74% |
| £1,500-1,999 | 1.86% | 1.63% | 1.32% | 1.26% | 1.15% | 1% |
| £2,000-plus | 3.89% | 3.05% | 2.13% | 2.41% | 2.29% | 2.43% |
Source: FCA
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Consumer Duty fee assessment explains broker fee changes
Stephanie Charman, the Association of Mortgage Intermediaries’ (AMI’s) CEO, explained that since 2023, firms have been required under Consumer Duty to conduct “detailed fair-value assessments of their fees to ensure they are proportionate and relative to the cost of the service received by their customers”.
“These assessments will have prompted advisers to re-evaluate their fee model, which explains the recent shifts in the proportion of firms charging, or not charging, fees. The data indicates that the largest single increase, though modest at 6%, occurred in the £1-499 fee bracket between 2023 and 2024.
“This period of time was marked by rate volatility and wider economic uncertainty, both of which materially increased adviser workload. Frequent product withdrawals, changes in affordability, and heightened consumer anxiety created more touchpoints per case. Meanwhile, the shift from remortgages to product transfers reduced revenue for some firms, with many expanding their service proposition to proactively monitor rate changes,” she explained.
Charman noted that “additional operational demands” are likely to have been considered as part of firms’ fair-value assessments and may have “instigated an update to their fee structure”.
She added that “broader business pressures”, such as rising staff costs, higher National Insurance contributions, technology and compliance expenses, increased professional indemnity insurance and regulatory costs have meant many firms will have reviewed their business models, and for some, they may see charging a fee as a “necessary and more sustainable long-term model”.
‘Advisers only charge a fee when the work is intensive’
Seb Murphy, group director at JLM Mortgage Services, said the figures “confirm what most of us have been saying for years”.
“Advisers only charge a fee when the work is intensive, perhaps having taken a number of months to secure completion, and it always tends to be wholly commensurate with the extra effort, time and resource required. Apart from these situations, most advisers are being paid for their work via the procuration fee.
“The standout point should probably be that the majority of advisers still charge nothing at all. Over half of all cases carry no fee, even when this data includes second charge and lifetime mortgage work, which is much more likely to come with a client fee,” he said.
Murphy said it was “understandable” that there has been an increase in the £1-499 band as there has been an “increase in cases [that] are often more complex, require greater levels of admin, or ongoing multiple communications with various stakeholders, particularly back and forths with the client and the lender”.
He said the rest of the table “barely moves”, showing that “advisers are not pushing up fee levels”.
“It also tells you advisers are still trying to keep costs down for clients even while the workload grows. If lenders keep adding tasks and delay points, then small rises at the lower end may stay with us. But I do not see any sign that advisers will start hiking fees across the board. Most advisers do not want to charge a fee unless the case forces their hand. These figures support that,” he said.
Higher fees can only be charged by ‘special dispensation’
Ben Allen, managing director at The Right Mortgage & Protection Network, said its own data supported the trends seen in the FCA figures, as most brokers continue not to charge an advice fee, but there has been a “gradual rise” in those introducing modest fees.
“Within our network, just under 60% of cases remain fee-free, and the mean average fee (where one is charged) has risen slightly to £401. The most common fee band is £1-499, now accounting for around 31% of business compared with 23% in 2019.
“This rise likely reflects the increased costs of running a compliant advice business, from technology and professional indemnity insurance costs to the resource demands of Consumer Duty. It should be noted that the rise in fee adoption and broader fee levels have not been in line with inflation, effectively impacting firm profitability,” he noted.
Allen said there had been a few instances of fees above £1,600, but this can “only be charged by special dispensation”.
“Our fee model was reviewed in line with the introduction of Consumer Duty, and again as part of our annual Consumer Duty Review, resulting in a £1,600 maximum fee cap. This recognises both inflationary pressures and the need to ensure good consumer outcomes and fair value.
“As the FCA’s Kate Tuckley stated earlier this year, ‘Our [the FCA’s] role is about setting standards and not prices.’ That message reinforces our approach, ensuring advisers have flexibility to charge fairly for the service they provide, to cover their costs, to run a profitable business while continuing to maintain transparency and value for clients,” he said.
PTs, geography, competition and complex lending influence broker fees
Richard Howes, director of mortgages at Paradigm Mortgage Services, said the figures offer a “useful snapshot of how broker charging habits are evolving and the subtle shifts that have taken place since last year”.
He agreed that key trends were that most advisers are still not charging a fee, but that there had been a modest rise at the £1-499 fee mark.
“That slight shift should probably be seen in the context of a market where product transfer business has continued to grow. As product transfer procuration fees are almost universally lower, brokers are understandably seeking to protect margins. Introducing small fees is a pragmatic step to maintain viability while continuing to deliver fair value for clients,” Howes explained.
However, he said there were other dynamics at play, such as geography, as brokers “operating in higher-value markets” – such as London and the South East – are often “able to offset costs through larger loans and higher procuration fees”.
This compares to those in “lower-value regions” as they have “less flexibility”, so that can “make it harder to absorb rising costs without charging a client fee”.
Howes said: “Competition also shapes behaviour. In areas where rival firms routinely waive fees, it becomes difficult for others to charge without appearing uncompetitive, even if the advice process and support offered justify it.
“It’s also worth noting the impact of the ‘Big Six’ lenders increasing their share of business over the past year. Their streamlined criteria and processing speeds have made cases easier to place, particularly for advisers handling straightforward transactions. In that environment, some advisers have felt more comfortable reducing or removing fees altogether.”
However, he noted that when it comes to more “complex lending”, such as specialist, self-employed or adverse cases, the fee picture is different.
“These cases require more work, more time and a deeper understanding of the client’s wider financial circumstances. In those instances, both the broker and the client tend to recognise that the additional effort and expertise come at a cost, which is why we’re seeing modest growth in the £500-999 fee band,” he explained.
The introduction of Consumer Duty has also prompted many to “reassess their charging structures and demonstrate clear value for money”.
“Some specialist brokers initially maintained higher fees even when placing cases with mainstream lenders, but as the market has settled, most have aligned their pricing to reflect the level of work involved.
“Overall, these figures suggest the market is finding a more natural balance between competition, cost pressures and value perception. Brokers are under no illusion about the need to remain efficient and competitive, but they also recognise that the advice they provide, particularly on complex cases, deserves to be fairly remunerated,” he said.
