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Which? way to turn?

Mortgage brokers have raised concerns over plans by Which? to launch a free mortgage advice service.

The service, which will be phone-based, launches this month and claims to look at every mortgage from every available lender, including direct-only products. Which? says its advisers will not be paid commission and will work on a salaried basis only.

Which? is planning to fund the service itself with the help of any procuration fees paid by lenders.

Commercial director Chris Gardiner, who is heading the service, says: “Our members tell us that they find it difficult to know where they can turn to get trustworthy advice from someone who will give them the full picture. We believe this service will give our members access to the advice they want.”

A Which? spokeswoman told Money Marketing it does not rule out moving into other areas of financial advice such as pensions or investments if members ask for it.

Your Mortgage Decisions director Dominik Lipnicki and First Action Finance head of communications Jonathan Cornell say the move does not seem natural for a body which paints itself as an independent consumer champion. Cornell says: “Which? is supposed to be a consumer organisation and while I am sure it endeavours to make a profit, it just does not seem like a natural fit.

“I think there is room in the market for lots of different models and I wish them luck but it will be more difficult than Which? thinks.”

Lipnicki says: “This is clearly not where its expertise lies, which is to be an independent reviewer, not a mortgage adviser. People should go to the experts for advice.”

Savills Private Finance managing director Mark Harris questions Which?’s motives for launching the service. He says: “It claims it is launching the service because its members want it but we have never had anyone ring up and say they did not know where to go to get trustworthy advice.”

John Charcol senior technical manager Ray Boulger says if it is the case that people do not know where to go to get advice, then Which? has failed in its duties.
He says: “If it had done its job properly, it would be giving readers information about where to go to get independent, good quality, whole of market advice.”

Boulger adds that Which? will have to pay high salaries to attract quality advisers.

He says: “Unless Which? pays decent salaries, it is not going to get good quality advisers. Our experience is that while there are plenty of people looking for jobs, there are only a small number who meet our standards.”

But London & Country head of communications David Hollingworth says the move is a good advertisement for the industry because it encourages consumers to get advice.

He says: “Which? is putting its stamp of approval on advice in terms of it being the right thing to do.”

Chadney Bulgin director of mortgages Jonathan Clarke says Which? could be a threat to mortgage advisers.

He says: “It is such a well trusted name that I think people would be quite likely to lean towards it. I think it could be quite stiff competition. If I did not know anything about mortgages it is most likely the place where I would start. People do take what Which? says as gospel.”


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. You must be joking 19th November 2010 at 2:33 pm

    I think the next journalist who insists on calling Which?’s proposed service FREE, when it is quite obviously going to be funded by procuration fees (Commission by another name) should be sacked!

  2. They are making out that the advisers they will employ are trusted. The advisers will be no better than a firm of mortgage brokers.
    So what Which are really saying is that their clients trust which rather than the FSA.
    How can you not trust FSA approved mortgage advisers.
    They are giving advice over the phone and really not allowing face to face advice. I would much rather have face to face advice.
    They will launch investment advice that is for sure.
    Next one will be the FSA to start giving advice.

  3. Like many other (with a vested interest) I respond the incursion of which into the mortgage field with some dismay. Putting my personal concerns aside, though, it is entirely inconsistent for any independent consumer organisation to enter the retail field. Indeed, let them offer advice, if they wish – but not sales.

    I look forward to two developments. The first is Which? selling other products – washing machines, perhaps? And the second is to hear about the first upheld complaint by a consumer. Now THAT will be worth waiting for.

  4. I gave up on Which reports many years ago when it became evident that only certain product providers ever got into the frame – I’m talking about washing machine, cameras and lawnmowers here.

    And as foe Which advice just look at Equitable Life and how they were championed by Which years ago.

    And will Which take into account the whole picture of a client’s circumstances before making an assertion about the best mortgage for a client – even the decision between fixed and tracker is very important and a frank face-to-face discussion on the implications of getting it wrong is always preferable to a telephone factfinding exercise.

    But the main point here is that the FSA has allowed a complete and utter mishmash of regulations to come into force which allow the likes of Tesco, M&S, Which and others to enter into a market place where IFAs have to write 30 page reports, tick a hundred boxes and can be referred to ombudsman and the courts (even 20 years after giving a piece of advice) but Which will simply be able to say that they offered information and the client made his own choice (no liability but still pick up the procuration fee).

    And how is it possible for Which to claim it has no vested interest in recommending any one product over another and yet earn from the recommendation. The FSA needs to explain how this conflict of interest will fit within its own regulatory framework.

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