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Advisers getting record proc fees as average hits £420

Mortgage advisers are getting record procuration fees, says the Paragon Group.

Research from the specialist mortgage lender says 95 per cent of advisers now receive some form of fees from lenders and the average payment is now £428 for each new client. This is a 17.5 per cent increase in the level of fees paid in the last 6 months.

In almost 30 per cent of cases, advisers are getting more than £500 per case.

The published figures show the changing face of mortgage advice for intermediaries.

In 1995, less than 70 per cent of advisers received fees or commission from mortgage lenders and the average payment was less than £150. Even three years ago, the average level of fees was only £250.

Paragon Group director of communications Nicola Severn says: “This research suggests that intermediaries are doing very good business, with an increasing proportion of borrowers consulting them before taking out a loan.”

Highclere Financial Services partner Alan Lakey agrees fees have increased recently but says average figures can be distorted. He says: “Buy-to-let proc fees tend to be higher than those that are paid for standard business. Similarly, advisers operating in Lincolnshire will see lower fees to an adviser that operates solely in Chelsea. Not all lenders pay fees so the adviser can be paid any where from 0 per cent to 1 per cent of the value of the loan.”

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