Press
Money Marketing 14th July 2005
Advisers question the accuracy of menu commission averages
A survey of 203 IFAs reveals that more than two-thirds think the accuracy of commission averages given by the payment menu is highly questionable.
The research, conducted for Money Marketing by George Street Research, ask-ed advisers about the ...
A survey of 203 IFAs reveals that more than two-thirds think the accuracy of commission averages given by the payment menu is highly questionable.
The research, conducted for Money Marketing by George Street Research, ask-ed advisers about the perceived accuracy of comm- ission market averages outlined on the recently introduced menus.
Twenty-five per cent say the menu is not very accurate and 43 per cent say it is not at all accurate.
On the issue of mortgage regulation, almost half of network members - 45 per cent and 39 per cent of the advisers - say the time taken to write mortgage business has increased substantially as a result of M-Day changes.
But from a base of 119 adv- isers who write mortgage business, 72 per cent say regulation has made no difference to the length of time taken to give mortgage advice.
Only 7 per cent are considering multi-ties in whole or part, with 90 per cent of IFAs adamant they are not considering the option.
Of these, 88 per cent are network members, even though many networks are in the process of develop- ing multi-tie panels which might lead firms to reconsider their stance or membership.
Attitudes have not changed much from a year ago, with 75 per cent saying there has been no change in the last year. Only 2 per cent say they are more or less likely to multi-tie in part or more likely to multi-tie fully than a year ago.
Bloomsbury Financial Planning managing director Jason Butler says: "I think the menu is a red herring. Ifyou are into shifting business as opposed to giving proper advice for a fee, why should you be able to hide behind a commission charge paid by a third party? I would have more trust in the regulator putting together an accurate and correct menu than I would most IFAs."
Bob Brown, owner of E Financial Planning, part of Millfield Partnership, says: "I do think that the menu has been treated with something of a broad brush. The range that you offer on the menu could be seen as misleading but you are covered by a fee agreement by your hourly charges. I think it is just a bit of bureaucracy. As for remaining independent, I think that most IFAs, certainly at Millfield, would say the same, although you should not be driven by commission rates that might be higher with a multi-tie in place and can also be independent but receive professional referrals."
Virtue Financial IFA James Carter says: "Mortgage reg-ulation has not really made that much difference to us. I have warmed to the idea after the initial shock of how much more paperwork there was to do, but it is just a case of dotting more i's and crossing more t's.
"I think that the mortgage code prepared us a great deal for it under MCCB and this is now just separating the wheat from the chaff, standardising the industry and getting rid of people who might not have been conducting their business in the best possible way."