However this does raise the issue of whether paying a fee is acceptable to the customer. Historically the trend was for brokers to receive their fees from the product provider and so the customer came to expect that they would pay nothing themselves, if I am a typical customer.
So against this background it is I can see difficult to change the customer into someone who has to pay for the advice he gets, and how many customers would actually believe that the broker was not making money from the sale of the mortgage too, even though this is disclosed within the paperwork.
So here is some of the feedback that came in, and as yesterday was for fee charging I shall focus on the opposite view today.
Paul from Net Worth Independent says:
Naive nonsense this article. I'm guessing whoever wrote it does not actually sell anymore as this is usually the way. Ten years ago you could have got away with "selling a fee" to the customer.
Since the internet and self sourcing of products has gone mainstream it''s much more difficult. Are the customers capable of doing this well? Fortunetely No! However do they understand that they are not really capable of doing this well? Unfortunetely also NO!
They often tell you they have found the same rate direct, no fee. If you convince them of a few areas they might go wrong in then al ot of the time they say "oh, well i'll make sure that I look out for that then" and go to the lender anyway but armed with your advice on how not to get caught out. Now of course not everybody behaves like that but anyone who doesnt acknowledge that this has happened to them in my experience has not been successfully charging fees themselves.
Barrett Batchelor says:
I'm at a loss on this one. How does charging a client a fee for (what will almost certainly be) a more expensive product, overcome the dual pricing problem. This is no answer to the problem at all, just another slant on "lets hit the consumer for as much as we can". There's nothing wrong with charging fees, but to say that its the solution to dual pricing is nonsense. They are two entirely different issues.
Mike at My Mortgage says:
I am getting a little tired of hearing Mr Angliss's view on clients willingness to pay a fee for mortgage advice. Being the MD of a sourcing system reliant on fee charging brokers his continual input on this debate basically amounts to free marketing.
He is completely wrong as to the general public's propensity to pay for mortgage advice. There are only two sectors that are generally receptive to paying fees the rich and the desperate and in the current climate the latter group usually come with the baggage of adverse credit and are quite possibly beyond help so the fee wouldn't be forthcoming anyhow.
Of the great majority in the middle, espicially in the increasingly tight economic environment the thought of paying several hundreds pounds to a broker they have not used before or one that they have and did not charge a fee last time is virtually always a non starter. Mr Angliss seems to acknowledge this towards the end of his piece suggesting that if the deal can be placed a commission route should still be followed. Most people when faced with a bill for lets say £295 for being directed to their local HSBC branch to have to go through the whole fact find process all over again and sort things themselves are going to be pretty reluctant to cough up.
S Ward at R Mortgages says:
So Richard Angliss is saying that any broker not charging a fee is not intelligent! I don't charge a fee and I'm intelligent enough to see that he is just using this opportunity to sell his wares for free!
Julian at Thornhill Financial says:
I am sure this debate is at the forefrunt of most brokers minds at the moment - I would love to adopt this approach - Lenders would soon quickly do a u-turn I am sure, but, I can't get my head round charging a client £250 and then telling them to arrange the application themselves. It would be ok if we could at least package the application for our clients, but we can't because in my experience lenders refuse to deal with you and will only speak to your clients directly.
Thank you all for your comments, please keep them coming in as the problem of dual pricing is not going to go away. Perhaps all brokers should unite and start charging a fee as standard, then there would be no "free" advice. Or would this just make matters worse for the broker market. What is your solution.
Emails to [email protected] please.
