More brokers charge for mortgage advice

In these difficult market conditions, many brokers are charging their clients for mortgage advice. At ContractorFinancials we are committed to fees-free mortgage advice for our clients in these cash strapped times.

As Independent Financial Advisers we are authorised and regulated by the Financial Services Authority (FSA). One of the regulations of that the FSA imposes is that mortgage brokers must offer their clients a choice in terms of how they are paid for the service they provide. The first option is that the client does not pay for the advice given but the broker instead takes an introducers commission from the lender that the client ultimately uses. The second option is that the client pays a fee to the broker for finding the mortgage (a percentage of the loan amount or a flat fee) and the broker passes any commission from the lender, back to the client.

At ContractorFinancials we offer both options to our clients, but we prefer to take the fees-free approach to mortgage advice. This means that our clients do not have to pay us at all for the advice they receive and we simply take the commission from the lender on completion. We feel that this benefits our clients as they are not out of pocket and you are still able to receive independent advice on the whole of the market.

However, alarmingly many more IFA's are now charging their clients for advice even if they decide that they want the broker to keep the commission. Increasingly fees-free advice is becoming a thing of the past as clients are forced to pay and then also miss out on the commission refund that would normally be paid to them if they had chosen the fee route.

John Charcol, an established IFA is one of these brokers, charging £250 to clients for the advice that ContractorFinancials gives free of charge. The following excerpt is from the John Charcol website; "there will be a minimum fee for our service of £250, of which £100 is payable when you apply, and we will retain the commission from the lender. Alternatively, you can choose the fee only option which is typically 0.63% of the amount borrowed."

Whilst we understand that some brokers feel the need to charge their clients to make ends meet during these difficult economic conditions, we would like to infom our clients that ContractorFinancials is committed to offering advice you can trust, free of charge.

If you have been happy with the service you have received from ContractorFinancials, then please feel free to recommend any friends that are currently using a fee charging broker. If your friend chooses ContractorFinancials to broker their mortgage or remortgage then we will reward you with £50 to thank you.

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