Coffin Dodger

Got a couple of things to sort out in the not too distant future:

1. Re-mortgage of our current home, the fixed rate we were on expired a while ago and we've been on the building societies SVR. It was useful sticking with them as they let us extend the mortgage to build our extension but now the house *should* be valuable enough achieve 75-70% LTV so I'm looking for a better deal.

2. Need to shore up our life assurance provisions, wasn't an issue when it was just me and the missus but now we have a little'un I'd like to make sure he is well catered for if the worst were to happen. Probably a level term policy to last until we expect him to be in a job.

Now I feel more than capable of sorting both the above. Easy enough to use MoneySupermarket to find the best deal for the mortgage (probably go for a tracker) and an on-line broker for the insurance.

However we have an IFA, he's a nice enough bloke, sorted the missus out when she bought her first place and subsequently got us the mortgage on our current home but I do kind of feel I could tell him what mortgage he should be getting for us. On top of that he charges a fee, justifies this as he says they don't get as much commission as they once did selling mortgages. Now the cold hearted part of me wants to tell him that we no longer require his services but he could be useful in future. If nothing else it saves a load of form filling effort on our part.

He's coming over next week.......?

Chip

Mortgage wise you will get a better deal going direct rather than through a broker.

Do your own research into into and you will find a deal as good as or better than an IFA ill get you as they are usually affiliated to certain companies.

Chip

mamoon2

HSBC were doing the best deal when I got my mortgage (residential) - 2.99% not available to brokers only direct.

I use an IFA for Buy to Let but he receives around £300 commission per mortgage and I don't pay a fee. You shouldn't be paying a fee really, they receive £250 minimum

EddScott

Thats not really true.

For the sake of transparency, it is far better to charge a flat fee to a client rather than a fee and some commission that may or may not be disclosed.

Although all fees and commission are clearly stated on any Key Facts (illustration) so the client should really be fully aware of all the costs involved.

We charge £250 for a mortgage case - although we really only do them for existing clients.


As far as the life assurance is concerned I've seen these online brokers mentioned on here. Can't remember which one it was but I put in my details and they were not competitive compared to us.

Nationwide only sells Legal & General policies yet we were still capable of beating them on price (even with exactly the same Legal & General policy)

Don't just dismiss the IFA because he's going to make money out of you - clearly these online brokers make money from you too. Also, I would point out that if the policy was ever required to make a claim, whoever was dealing with the claim would get far more help from an IFA worth his salt or some website. Life Assurance companies can be either sweet as a nut a pay out in days or complete w*nkers and take months (and if it takes months a decent IFA will punish them financially for their incompetence)

It may seem alot of money too that the IFA is earning from you're life assurance policy. It isn't too much if you look at it over 4 years (this is the time in which the up front commission is liable to be returned if the client stops paying)

If you buy car insurance through a broker, they make a bit of money on each payment. If you said to the broker you'd use the same insurer for 20 years, the broker would get more money from the insurer because they are expecting this money. Life assurance is really no different.

It is also possible to take life assurance commission over the 48 months if you feel that is more acceptable (actually it also works out a bit more for the IFA over 48 months but not enough to get twitchy about) If it's a large premium say over £100 then the commission is going to be quite high. It's always possible to give up some of the commission to reduce the premium. You can also just pay a flat however, if you pay £500 as a fee and then you stop paying that £500 stays with the IFA - although your premiums will be less. If you let them take £500 commission and you stop it after 12 months, yes you've paid a bit more but the commission has be returned (or 25% after 1 year)

BIG POINT ON LIFE ASSURANCE - make sure you put it in a simple flexible trust. Let everyone know exactly what is expected with regards to who gets the money and bypasses probate so the money is with those that need it much quicker.

Also - make sure your will are up to date. Not sure I'd bother with these DIY jobs. A Solicitor shouldn't really charge more than £100 and don't use these will writer people - got made a fool of by one of these that was supposed to be a friend of the family and tried to fiddle a client of ours out of a few hundred quid more than was necessary. Client didn't really forgive us for that one.

If this is the case they are not an IFA, they are known as a "tied agent"

A true IFA has the whole of the market to choose from and won't favour one over the other.

Jer

I was looking at this site last week. http://www.moneybackmortgages.com/ I think it gives £170 for every £100k borrowed. It came up with the same mortgage my FA chose for me.

Chip

You are of course quite right, I do think though that a lot of advisors do try to come over as being independent.

Chip

EddScott

I suspect that some of these tied agents do tend to avoid mentioning that they can only recommend products from one company, there own. It's usually the direct selling force of a bank or life insurer. Very good sellers, poor advisers.

Chip - if you're ever in need, we have an office in Cardiff One lad there is probably the most knowledgeable chap we have.