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Fees are only fair way for mortgage clients

Fee-based mortgage advice is the only way of advising clients fairly when cheaper direct deals are on offer, according to Create Wealth Management.

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.


Apple: a stellar technology story

By Ali Unwin, head of technology sector research

Apple recently announced the highest-ever recorded quarterly net profit ($18bn), with the sale of 74.4 million iPhones helping the company deliver $74.6bn of revenue for the quarter ending December 2014. These sales were largely driven by strong demand for the new iPhone 6 and iPhone 6 Plus. Highlights included Chinese iPhone sales doubling year-on-year and unit growth of 44% in the US — supposedly a well-penetrated market. Apple ended the quarter with $178bn in cash on its balance sheet, having generated a staggering $30bn in free cash flow during the quarter.

At Neptune, we have been long-term believers in the Apple story, and continue to hold the stock in a number of our portfolios based on the company’s long-term growth prospects. This is predicated on our belief that Apple has proved thus far that it can — unusually for a consumer electronics company — maintain high margins for a sustained period of time, even as adoption of new technology slows down and competitors produce similar-specification products.


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