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The real facts on fees

Over the last few weeks, some sensational language has been used concerning retention fees, mainly by individuals who have a reputation for trying to destroy anything which does not fit with their particular business model, for example, packagers.

This is a real shame because as an industry we have a responsibility to welcome anything which improves consumer transparency and choice. Phrases such as the “FSA are watching this issue” are designed to strike fear into intermediaries, yet completely contradict the facts and misrepresent the vast majority of the industry.

It is notable how far some people will go to try and twist an issue while demonstrating a fundamental lack of understanding of the subject of retention fees. So a quick review of the facts:

Fact: Robin Gordon Walker from the FSA, quoted last week, said: “As far as we are concerned, there is not even a disclosure requirement. We want the industry to develop and therefore these fees are not a problem.”

Fact: Rob Griffiths, Association of Mortgage Intermediaries, said: “Brokers are highly trained and regulated consultants who can guide consumers through the options available. Provided all the standard procedures are followed, then we fully expect consumers and brokers to benefit from the additional choice that product transfers bring.”

Fact: A recent survey of 200 brokers revealed that 98 per cent support the payment of procuration fees on product transfers.

The sad thing is that despite these facts, it will not prevent people making the comments they make. However, they are useful for everyone else to put their comments fully into context.

Tim Hague

Managing director BM Solutions

Wolverhampton

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