Can mortgage advice really be independent?

Mortgage advice may be truly independent if your Adviser:

  • has access to the whole of the market;
  • is not tied in any way; and
  • discloses how he or she may be paid for giving the advice. For example, will the lender give your adviser a commission?

The whole of the market
If you are approached by a bank or building society where you are already a customer, they may be able to suggest a selection of products for you to choose from. However, despite the convenience this option may seem to offer, one bank or building society’s range of products may not always contain the most competitive product for your needs.

Accordingly, if you visit a “Tied Agent” who is limited to recommending the mortgage products of a small panel of Lenders, you could be missing out on the right product that may be out there for you, but because your adviser’s hands are ‘tied’ they are not be able to make you aware of it.

A further potential problem with dealing with Tied Agents is that there horizons may be limited, compared with Professionals who offer Mortgage Advice that is truly independent. Advisers who deal with the whole of the market offer advice to a wide range of people, including:

  • first-time buyers;
  • buy-to-let investors;
  • people with credit problems; and
  • remortgage customers.

At Shire Financial Management we scour the whole market on your behalf, sifting through thousands of products to find the perfect ‘fit’ for you.

A small matter of getting paid
The issue of how Mortgage Advisers are paid may also affect how you feel about the independence of Advisers. If you want to know how an Adviser’s firm is paid for the advice they give, just ask them! This is a perfectly valid question and should be answered with ease by an Independent Financial Adviser.

Some may charge their clients hourly fees. Others may accept commission from banks and building societies in relation to the products they have sold. Some Advisers may charge a bit of both for the advice they give. If you are concerned about the independence of the mortgage advice you receive being compromised by commission, you may be able to ask to pay the Adviser on a fee basis instead.

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