Mortgage intermediaries are exposed to embarrassment in front of their clients when lenders indiscriminately change their procuration fees, says Mortgage Portfolio Services mortgage planner Simon Chalk.Chalk says significant changes in payments not only go against the initial KFI seen by the client but also result in the client being overbilled or underbilled by the intermediary, creating consumer confusion. In a recent application with the Halifax, Chalk says his fee was reduced from the minimum fee stated in September of £150 to £70 when the mortgage reached the completion phase. A KFI must disclose to the client all fees, commissions and earnings. Procuration fees, which intermediaries are required to input manually, are often estimates which have to be within reason and as accurate as possible. Halifax says intermediaries are paid based on completions and not applications and the fee can change accordingly. Chalk says: “The basis of a KFI is to be accurate for the client. We should get paid exactly what is displayed on the KFI so we can be sure we have disclosed the correct fee. This is the principle maintained within MCOB on disclosure.”
There has been a lot of talk about the positive impact on the self-invested personal pension market of the simplification proposals, particularly the opportunities arising from the new investment freedoms. However, far less has been said about the increasingly restrictive impact of the governing rules on protected rights.
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The Personal Range Individual Personal Pension
Progress in the relationship between IFAs and the FSA has been a case of one step forward and two steps back, Aifa director general David Severn told Money Marketing roadshow delegates last week.
Paul Casson, manager of the Artemis Pan-European Absolute Return Fund, explains why he likes Irish housebuilders but is shorting banks – and how one Spanish TV company is going against media trends. Click here to read more
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