Brokers can only offer their clients the best possible mortgage if they flag up direct deals and charge a fee for their services, says managing director Peter Davies. He says now that many of the most competitively priced mortgages are only available direct from the lender, brokers are not treating customers fairly if they do not tell their clients about these deals.
Last week, the FSA revealed it may scrap the payment of mortgage procuration fees and introduce adviser charging in a bid to stamp out product bias.
Davies says his firm charges a fee for its services and refunds proc fees on completion of a mortgage. Suitability letters given to clients highlight where any direct deals are more competitive than those available through the broker.
He says: “Clients pay fees for everything else, why not for mortgage advice? If you want to be independent you have to charge fees across the board.”
Nationwide head of intermediary sales Ian Andrew says: “Many brokers have operated a fee-charging model for years but we have certainly seen an increase in the number of intermediaries choosing to do so in the last year or so.” But Andrew addes that there is still a place both for fee-charging brokers and those who opt for proc fees.