Roughly speaking firms are charging between £275 and £299 to clients for arranging a mortgage although some firms charge as little as £99 and others up to £499.
Legal & General’s mortgage club managing director Ben Thompson said the figure tallied with his experience of firms and suggested there had been a significant rise in fee charging in the past four years.
He said: “I would have said around 25% of firms charged a nominal fee in 2007 whereas now that number is probably in excess of two thirds.
“Five years ago customers just wanted the cheapest deal whereas now they’re asking whether they can get a mortgage at all.
“Given the adviser now has to be that much more specialised, to charge a small fee seems completely reasonable.”
Alan Lakey, principal as Buckinghamshire-based financial adviser Highclere Financial Services, said he believed lenders cutting proc fees earlier this month would further drive this shift.
And he added: “If my own business is any gauge then proc fee income is already down 75% since 2007 and this latest slap in the face can only depress income levels further.
“Ultimately it is advisers’ clients who will pay as increasingly firms are introducing fees or increasing existing fee structures.”
Lakey went on to suggest it was possible that in future most mortgage advice could be structured around a consultation fee allowing the consumer to approach the selected lender direct.
He said: “This would enable advisers to profit from the many better direct deals available whilst continuing to add value.”
Meanwhile Tom Cleary, financial services director at London-based broker Start Financial Services, said although more brokers were charging a fee it was necessity not choice forcing their hands.
He said: “I am all for making our role more professional but in a challenging economic environment and a ridiculously competitive market when other brokers are willing not to charge a fee, will the general public be prepared to pay for our advice?
“I absolutely think they should as we add immeasurable value to the process. But the sad reality is that not all clients are prepared to pay a fee when they can get what they perceive to be the same service elsewhere for free.”
