My Opinion: Brokers must act in clients’ interests

We live in cautious times so it makes sense for the industry to police itself

When you are out and about in this industry as much as I am, you cannot help but be privy to the issues affecting the broker community. I regularly hear of concerns brokers are having long before they become full scale issues. A recent example involves lenders wishing to limit the fees brokers receive for the service they provide.

I can understand why this is an annoyance. A broker’s business is just that – their’s – and it is understandable if they feel lenders should not get involved with the finances of that business. However, I can also see the lender’s point of view.

Let us not forget there is an enormous amount of scrutiny on the lending community, and there has been for some time. The last few years have not exactly been kind on the mortgage market. From the credit crunch that painted lenders as greedy and reckless, to the PPI scandal that saw the entire industry impacted, it is not surprising many are keen to play it as safe as possible.

With the FCA and the Prudential Regulation Authority keeping the industry firmly in their sights, many will be cautious not to be party to anything that could be classed as not treating customers fairly.

Lenders know they have a duty to do right by their customers – not just to comply with the FCA’s TCF rules but also to adhere to its code of conduct. A customer would expect lenders to be impartial and act in their best interest so they cannot simply turn a blind eye to things they see, such as unfair broker fees, even if it is not directly down to them.

Indeed, other professionals in the chain, such as solicitors, might also want to mention the overall case financials to the customer, though this is a risky move that could be seen as undermining the broker’s advice.

The fact is it is surely in the best interest of all parties to know the sensible parameters of the attitude towards fee charging and make sensible decisions for each client case.

Ultimately, all parties will have their own views and policy on such matters, but if sensible decisions are taken, there should not be an issue.

I have no doubt the vast majority of brokers are doing this appropriately but, as ever, a small minority can trigger rules to be put in place to protect the public.

These are cautious times we live in and we must understand the position of all companies in the home buying chain. Perhaps it is in each other’s best interests for the industry to police itself in this way. It is certainly in the best interests of consumers.

In other news, with the world of politics throwing us yet another curve ball in the shape of a snap general election, all eyes are on the campaigning parties and, for our industry in particular, their plans for the housing market.

Although manifestos have yet to be unveiled, shadow housing minister John Healey has been busy talking to the press about Labour’s plans in this area should they gain power.

According to Healey, Labour leader Jeremy Corbyn has told him to be not just the shadow housing minister but the shadow housing secretary, suggesting a Labour government would create a housing department.

Having a housing minister in the Cabinet is essential if we want to tackle the housing crisis head on. New reports out are claiming housing supply has fallen to record lows.

Now is the time for action.

Phil Whitehouse is managing director of MCI Mortgage Club