Which? fee-free mortgage advice service undercuts brokers
Consumer champion Which? has thrown open their controversial free mortgage advice service to the public.
The service is funded by commission paid by lenders – with no charges to clients even if no procuration fee is available.
The business model directly opposes adviser-led advice that charges a fee to clients or collects commission from lenders
Instead of paying a basic salary plus commission, advisers are paid a fixed salary regardless of the number of mortgages they complete.
Around 80% of mortgages completed since the service opened on a trial to members in November 2010 have paid procuration fees, according to Which?
The consumer champion aims to make the mortgage advice service one of the largest in the UK.
Customers can speak to one of 12 advisers, but the team is expected to grow to 20 within a few months.
A Which? spokesman said: “After a year of successfully helping members and their families, we have opened the service to everyone looking for mortgage advice, so that we can help all consumers choose the right mortgage.
“We will recruit more advisers as demand for the service grows, to make sure that our customers receive the highest levels of service.”
The service offers whole of the market advice comparable to any independent financial adviser or mortgage broker.
“The service will look at every mortgage from every available lender, including those mortgages that are only available directly from some banks and buildings societies to the customer. The service will be fully regulated by the FSA,” said the spokesman.
“Which? mortgage advisers’ employees are paid a salary and will not get any personal commission. They are measured against the quality of their advice and the level of customer satisfaction they deliver.”
Which? invites clients to pay a fee as a work round of mortgage conduct of business regulations that bar firms calling themselves ‘independent mortgage brokers’ if clients do not have the opportunity to pay for advice.
The service can be called ‘impartial’ – and Which? includes the wording several times on the mortgage web pages to make the point.
Categories : Miscellaneous
New category : Mortgages
Tags : mortgage advice, which?, mortgage brokers