May I express my concerns at the apparent unwelcome interest shown by the Financial Services Authority (FSA) on the question of commission and fees as remuneration for services provided to the general public.
The FSA, as a quango, has to realise that the insurance industry and allied businesses are private and not owned by the State, although if Chancellor Gordon Brown had his way, it probably would be. It cannot and has no right whatsoever to dictate how people are paid – it does not have the right or voting power of shareholders.
As your organisation is a mouthpiece for the Treasury and Consumer Association, have you considered the average and small person who has just as much right to our services as the high net worth clients? No way would they pay fees up front. And when discussing the ‘menu’, clients are not interested – they are happy that we are paid
commission.
If you push the fee route, you will rob the majority of the public from receiving good unbiased advice, which I am sure the banks will love. I am an IFA. I work an average of 12 to 14 hours a day for my practice and clients, and some who think nothing of calling you at 11pm at night, as well as on Sundays. ‘Treating Customers Fairly’? What about treating consultants fairly?
Clifford C. Linsdell
They’re having a MEAF
Dear editor,
Regarding mortgage exit administration fees (MEAFs).
So, has the situation all now been resolved? No. Are clients now being treated fairly? No.
Is a MEAF supposed to be an administrative charge? Yes. So does it now reflect the cost of an administrative charge? No. Have the lenders proved to us that their MEAFs can be justified? No. Has the FSA or Council of Mortgage Lenders (CML) reiterated that this should be, as they have stated previously, an admin charge only, now that the lenders have had the chance to revise their fees? No. Are the FSA and CML now going to come down hard on lenders who clearly are charging way over the top for the MEAF? It does not look like it.
If the processing costs amount to, on average, say £132.85 (recent Vertex & CML survey) and Defaqto says about £35 is real cost of a MEAF, can we square the circle? No.
So have we really achieved what is required to treat customers fairly and not bring the administration charges of the industry into disrepute? No. Does more need to be done?
Yes. Are the FSA and CML now likely to keep their heads down and do nothing more and hope it goes away? Seems so, but better ask them.
Danny Lovey
The Mortgage Practitioner
Calling foul play
Dear editor,
Yesterday I visited a new client for a first appointment and during the pre-match warm-up, the client informed me that he used to work in a call centre as an IFA for a well known high-street lender. As his current employment is engineering-related, I enquired why he had decided upon a change. His response was jaw-dropping.
In his own words, he had become thoroughly disillusioned at being set unrealistic targets (most of us could relate to that at some stage of our career, I thought), which, he went on to explain, had nothing to do with business generated or satisfied customers but the number of incoming phone calls that were placed on hold.
All incoming calls were on premium rate numbers and staff were trained to keep callers on hold for as long as possible. Staff were instructed to hold all callers on the line for as long as possible, no matter whether the caller’s query could be dealt with straight away or not. Staff had even been instructed to leave their work stations for a cup of coffee or a toilet break with the caller holding on for an answer with the threat of a disciplinary procedure if the targets were not met.
Now I have to stress that this is purely anecdotal evidence, although I cannot help wondering whether this could form part of an industry standard on premium rate numbers.
Any call centre managers care to comment?
Ian Hall
Vintage Business Limited
Treating us like fools
Dear editor,
I have many potential buyers for building projects, mainly land. But with so much now being offered only via a tender process – where the purchasers are expected to do all the work, i.e. provide design and layout plans in advance, perhaps even apply for planning permission at their own cost, etc – and not knowing if they will in fact end up with the site, they are not going to make an offer.
Whatever happened to the good old-fashioned way of setting a price, finding a buyer and agreeing a deal, subject to contract?
The only firms who can afford to forward bids by a certain deadline are the big players. Therefore, many smaller developers – who may well provide better homes for a smaller profit, which in turn might keep prices down – are left out.
I appreciate sellers want the best price, but are they getting it, if many builders will not even make a bid?
Once again, it has all got too complicated and that is going to be the same once Home Information Packs (HIPs) are law. I am almost certain that sellers will start using a tender procedure and buyers will then be in a ‘Dutch auction’, having paid out for their own survey reports, legal advice and so on.
After all that, the vendors could still decide not to sell.
From 1 June, the residential market will be in a state of chaos. Why does an Energy Performance Certificate (EPC) need to be produced in advance of a sale? Surely it is down to the potential purchaser to decide where they will spend their money to make any improvements? Any fool can see if there is double glazing, loft insulation, lagged pipes and so on. A visual inspection tells you if one of those pointless wind-turbines has been fitted, or solar panels. A survey report will provide that information, so you are doubling up on effort and costs.
This government treats us as fools when it is the government which has no understanding of life or business.
Richard F. Grant
Via e-mail
Stop the interference
Dear editor,
In response to ‘Hamptons warns HIP outlook ‘bleak’’ (MI Online, 21 February 2007).
This is yet another example of how poorly the government performs when it interferes with things it should leave alone. Governments’ almost always get it wrong when they delve into our lives and yet this one seems intent on getting more and more involved in every aspect of our lives.
I am dreading the introduction of identity cards and road pricing, which it seems intent on going ahead with, despite widespread opposition. Just wait for the cost overuns on the IT, not to mention the fact that it won’t work half the time.
Via e-mail
HIPs scaremongering
Dear editor,
Regarding ‘Hamptons warns HIP outlook ‘bleak’’ (MI Online, 21 February 2007). Hamptons is scaremongering. The implementation of HIPs is pretty shambolic, and the value of a HIP has been ‘watered down’, there’s no lack of clarity over surveys or EPCs.
There’s no obligation on a vendor to implement anything from an EPC. It simply gives an energy efficiency rating for the property. Over time, buyers may seek out properties with better ratings but in the short term I doubt it.
I imagine Hamptons is not organised to handle the introduction of HIPs.
Michael Day
Integra Property Services
Via email
