This week’s first round of comments is in response to the article: Exclusive: Over half of mortgage brokers charged no fees in 2022
David Goose said: “The amount of work brokers do certainly warrants a decent fee. Why do broker fees cause such an interest and an implied opinion that no fee is good? This whole broker fee and proc fee issue needs updating.
“Firstly, I would imagine that the ‘only 50 per cent’ comment relates to the fact that generally brokers do not charge for product transfers – so that alone would give that result. Solicitors, estate agents, valuers, stamp duty all these fees are generally accepted as standard, part of the process or a fee for a professional service.
“So, £500 to £749 would put broker fees at the very bottom of the charges levied by the other parties involved and great value in my opinion.”
Unrewarded labour
He added: “We brokers have to survive and make a profit to be able to give all the free advice that clients want and to a certain extent deserve.
“We work in a business where not all clients go ahead, some do not get past agreement in principle stage, some pull out, some change their minds. Let’s assume 75 per cent of cases go through, are we supposed to work for the 25 per cent for free?
“It is actually unfair that our existing clients, and the 75 per cent pay for all the free advice we give, it’s also unfair that our big cases subsidise the small cases.”
Goose continued: “Have we all noticed the huge fees lenders are charging lately? How have the Financial Conduct Authority let them get away with that?
“The fees I charge are for the work I do for the client. The proc fee I receive is for the work I do for the lender, not the client, and it does not come out of the client’s pocket.
“We spend hours doing unpaid work talking to lenders, solicitors, agents, I would be happy to switch to an hourly rate on all the work I do – but I do not think clients would like that.”
Clients will pay for a good service
Tom Silver added: “I have always charged a fee as a percentage of the loan borrowed. The percentage varies depending upon the complexity of the case. All my fees and terms and conditions are published on my website, and clients have to agree to them before I start work so there are no surprises to either my client or myself.
“The cost of providing advice with no cut off for the potential liability of that advice has gone up. Professional indemnity insurance premiums have gone up and so have the excess charges on each claim.”
“If a broker doesn’t charge a fee, then they have to make up their money by selling insurances that the client may or may not want. Lenders’ fees have escalated whilst my fees have remained constant.”
Silver continued: “The vast majority of my clients are existing clients who know and accept my fee structure and value my work as they consistently come back. Some have been with me for 15 to 20 years, so I must be doing something right.
“Complaints and cancellation of insurance policies is non-existent, as my approach always does what my clients want to achieve. I’m fiercely independent and won’t guarantee any lender a set proportion of my business.
“It’s a different way of working to the majority of others, but consistently successful and sustainable. There’s a big difference between being a professional adviser and a salesman with targets.”
Execution-only product transfers ‘not a new problem’
This week’s second comment is in relation to the piece: Brokers warn of potential problems with self-selected product transfers
Keith Thomson said: “This is not a new problem, clients not taking advice are always at risk of not getting the best mortgage deal, not just at product switches, but when any mortgage is taken.
“However, saying they miss out on features such as overpayments and portability is a pretty weak justification for this article – these are generally standard features.
“The real issue is that the clients do not value the service they received when they got the original mortgage enough, which is an issue that lies with the brokers, not the client.”
The comments here are from our readers and do not necessarily reflect the views of Mortgage Solutions and Specialist Lending Solutions.
