Sue Read is consultant, Marshall James & Co.
I am always delighted to advise new clients and remind existing ones that I am an independent financial adviser and have access to practically every mortgage scheme on the market.
This is a blessing and a curse as it means that while I can genuinely, hand on heart, say that I will find the mortgage I believe most closely matches a client’s situation and requirements, it also means that I have somehow to keep abreast of about 6,000 schemes at any given time.
I have always had a good memory. I can name obscure actors who starred in black and white films in the 1940s and for that reason I’m quite in demand at school quiz time. But even I cannot possibly remember every nuance of every available scheme, and I am sure no-one else can either. So of course I use a sourcing system to help me match client and product and this ends up being a fairly unscientific process.
Initially, like many of my peers, I am rate driven. Some industry leaders have stated their surprise that this is the case for most brokers. I can’t see why they should be. But then I’ve always found that lenders whose rates are not market leaders make much of the other ways in which you could make your scheme selection.
I begin with the headline rate because I have to start somewhere. I then consider other scheme features, including costs over a number of years, underwriting criteria and flexibility, and my experience of the lender’s service. Proc fees are way down on my list and do not influence my recommendations. But that’s not to say we don’t need them and I still believe that generally they are low, given the work we have to put in.
All of these factors help me to decide which scheme I will ultimately recommend. Some of these factors are quantifiable, while others are completely subjective. But as long as the client’s objectives are achieved, and I am able to justify my recommendations to the client and to the Financial Services Authority in a satisfactory manner, this should be a good job done.
So I was surprised to read in Mortgage Strategy
that Charterhouse Research has found that intermediaries do 58% of their business through only three lenders. This worries me, even after the additional comment that brokers are placing business through an average of 11 lenders.
I understand that niche companies might well skew the figures and I’d be interested to read the report in more depth, but generally even a small company such as my own should have to cast its net more widely than that – and we do.
I realise that researching mortgage products, making decisions about recommendations and obtaining Key Facts Illustrations is time-consuming and tedious. But if we are going to call ourselves independent we must start acting like it.