Brokers must be able to justify charging fees on non-conforming business if they are to be seen as treating customers fairly.
Adrian Kidd, an IFA for Mint Financial Services, believed many brokers were tarnishing the image of the industry by charging excessive fees, even though they are getting a large commission fee from the lender.
Kidd said: “It’s all about transparency and doing what is best for the client. But how can you look them in the eyes if you charge them 2 per cent when you are already getting 2 per cent from the lender? I wouldn’t charge that much on pension transfer business, for example, even though it is much more work and more risk to me.”
Fees in general have come under heavy scrutiny in recent months, with the continuous implementation of the Financial Services Authority’s (FSA) ‘Treating Customers Fairly’ (TCF) ideology also receiving plenty of attention.
Jon Burridge, managing director of Quantum Mortgage Brokers, believed ‘justification’ was the key word.
“Every business has got a different model and if you can show you are taking a fair price for the work you do, then that should be okay. It’s all about justification. We would support the argument against those caught up in the practice of charging unjustifiable fees.”
Rob Griffiths, associate director of the Association of Mortgage Intermediaries (AMI), said: “As long as the broker is fulfilling his duty in terms of the Initial Disclosure Document (IDD), the customer can compare fees from different brokers and use who they want.”
