Brokers have been quick to react to claims in a recent trade article that alluded to “fly-by-night” mortgage brokers adding the word ‘specialist’ to their titles, effectively as a money-making exercise.
The article also claimed that borrowers could end up with worse deals by approaching a broker over a specialist packager.
Free news agency Newspage asked brokers for their views as to who is better placed to advise clients in the specialist market and if there is a place for a broker who offers holistic advice as opposed to referring off to others.
Here’s what they had to say.
Matthew Jackson, director at Mint FS:
“When it comes to specialist advice, relationships are everything. I doubt comments like this will help build relationships with brokers. There is a place for packagers, as not all brokers either have the will or skill to advise on all types of finance. But to describe those that do as “fly by night” is either brave or just plain stupid for someone who works for a firm that relies upon referrals for its business.
“Personally, I find the suggestion that a client would be worse off for not using a packager as the hardest comment to swallow, as typically packagers charge eye-watering fees for their advice in comparison to a broker and do little if anything to justify them.”
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“Packager reliant on referrals from brokers to make income bemoans brokers doing the full shebang. Shock. However, there is an element of truth that some brokers will profess to be able to do it all when, in reality, they can’t, and they’re scratching around for any business they can lay their hands on.
“You can usually spot them; they’ve been advising for six months and now have the title ‘senior mortgage broker’. For example, I have permissions for second charges, bridging, et al, yet I would refer that off simply because I don’t do it regularly enough to keep up with that segment of the market.”
Justin Moy, managing director at EHF Mortgages:
“Experienced mortgage brokers will be more than comfortable with working in specialist markets, whilst those new to the industry may not be skilled sufficiently and that may be the danger trying to be highlighted here.
“However, as a packager that relies upon a referral model for business, and adopting some high added fee models, they need to make sure they don’t end up costing broker clients a poor deal themselves.”
Robert Timm, managing director at Sunland Mortgages:
“Of course there is a place for holistic advisers. If an adviser is confident enough to research and find the best solution for their client, who has put their trust in them, then absolutely they should be able to assist.
“Conversely, if a broker doesn’t feel confident in a certain area, there should be an opportunity to refer to a specialist packager. But holistic brokers should not just be expected to do standard first-time buyer loans and remortgages.”
Charles Breen, founder at Montgomery Financial:
“It’s all about experience and ability and not titles. Some packagers hide behind their position as “experts” simply to charge eye-watering amounts but provide a terrible service that a quality broker who is knowledgeable and competent could easily provide. Packagers are more often than not just expensive middlemen.”
David White, chief operations officer at Simply Lending:
“I agree with the sentiment but believe drawing a line between brokers and packagers is misguided. Many solo brokers are highly experienced, while some within packager firms may still be learning.
“However, the ease with which one can obtain CeMAP certification, register a company, and begin trading has saturated the market with self-proclaimed experts, making it challenging for consumers to find reliable advice.”
Mark Robinson, managing director at Albion Forest Mortgages:
“This is a ridiculous statement. An experienced broker will be just as good as a ‘packager’ whose primary job is to make sure the broker hands over all the correct paperwork, which is essentially the job of an administrator.”
Simon Bridgland, broker/director at Release Freedom:
“Any company name or strapline is of course to entice customers to that particular business. Specialist brokers and specialist packagers are simply a conduit to get the client where they need to be. The term specialist is often used in my mind to attract a client to that service, after all, you wouldn’t take your Lambo to ‘Dick n’ Daves’ Garage Services’, but you would likely take it to ‘Lamborghini Specialist Services’.
“Many packagers don’t have brands the customers recognise or trust, so in comes the broker, who often already has the client’s trust or is referred to from a trusted source. That broker can then refer to the packager, if needed. Packagers deal with a handful of lenders to present a ‘fully packaged’ case, often with no advice given on their part. A packager who bemoans the broker who acts in the best interest of a client and performs financial triage by refering off to a particular specialist packager, is kind of biting the hand that feeds them.”
Emma Jones, managing director at Whenthebanksaysno.co.uk:
“I am excited to see more brokers wanting to move into specialist areas of advice. I honestly don’t believe this is a “jack of all trades” approach because we need more complex advisors that are equipped to provide solutions for all client situations.
“Having more experienced advisers covering specialist lending and not having to refer to third parties enhances the customers journey, retaining that relationship for life.
“We have been in the specialist space for several years now and I can honestly say that investing in advisors’ training, knowledge and development is the way we improve the industry as a whole. A tough feat that takes time and effort for any principle.”
Rohit Kohli, Director at The Mortgage Stop:
“It’s disappointing to read comments like these. To call inexperienced advisers “fly-by-night” probably isn’t the wisest choice of words from someone that relies on business from these exact same advisers.
“The term “specialist” is often used to inflate fees and when you have a relationship with a client rather than pass them to someone who will charge an eye-watering amount, it’s about putting in the extra effort and research to find them the right solution.”
