Not for profit mortgage club

Hi Martin,

I have a couple of questions:

Would the proc fees be paid directly to the adviser/company? Or go via your mortgage club?

Whats the situation/plan with regards to limited distribution lenders?

Cheers

Hi Dorko

We dont really care how it gets paid so long as 100% of the proc fee on the offer arrived in your account! Some lenders might want to pay through the club and others pay direct. 

There may be limited distribution to a degree but if we can get the majority of the top 20 lenders that would do for a start. If there was a lender not available but there was through another club then clearly you would just elect for that payment process.

We are not reinventing the wheel here , i tried that before and ended up with a wheel ! This is more a Ryanair mortgage club model with costs and fat stripped out totally so you earn 100% of the proc fee. If you want a more execuitive feel and a massage and possibly a free meal then clearly other mortgage clubs will be available :0) 

Martin

Hi Martin

Your maths work, it makes sense to me, and we are in the target band of turnover for your brokers.

A couple of observations:

Payment

Since the Network Data fiasco we have generally avoided mortgage clubs who receive the fees then pay on. A direct to broker proc fee payment would be the way to go.

Range of services

You need to include a life panel to make things comprehensive

Eliminating frustration

One thing that does bug us is new Lenders distributing only through the likes of Sesame and Intrinsic, ignoring DA's. Having the buying power to attract new lenders would be key.

Fees

I don't see the fee quoted in your article as being enough to run the operation in the best way.

If this new Club was big enough to have a voice with the Lender's, Insurers, and the Regulator, it would do a better job for the broker than many of the incumbents.

We know of some Mortgage Club's offering a refund of half their margin to Brokers. You should better that, still gaining enough revenue to create a fully rounded service.

Thresholds

Consider limiting membership to firms generating sufficient revenue, as the revenue is key to the buying power. The more revenue the broker generates, the more adept they are likely to me, the more they can contribute to the whole.

You are better having 500 brokers generating £20B than 1000 generating £30B

All valid points Spurs, perhaps you can drop me a line direct and i'll get you added to the "interested list".

To quickly answer the above:

PAYMENT - i see this as being an incorporated entity with memebrs buying a share . There is no connection with any company and there are unlikely to be any liabilities or overheads associated with the company. Simply a mechanism to get the full proc fee

SERVICES - Can be added in due course

FRUSTRATIONS - Cant eliminate that but the FCA  review about "conflicts of interest " announced today might !This is about levelling the playing field for us all

FEES - still a work in progress but for this to win the moral high ground it needs to be the opposite of all other clubs . You did a job that earned £1k proc fee? Then you deserve to receive a £1k proc fee

THRESHOLD - It is scaleable but it needs to be bedded in first. If it falls over due to being too sucessful then all credibility is lost

I like the idea of a club that gets you 100% of the fees. I dont want to go to dinners and meetings set up by my mortgage club. I have Simply Biz and the FCA for stuff like that.

With regards to the limited distribution I was hoping there would have been a push to get all lenders on board, but I take your point that I can use another mortgage club if a lender isnt availabel through you. To be fair, thats not really the focus of the mortgage club is it?

Like Spurs, I am wary abotu having my fees tied up with someone else so would prefer a direct payment from the lender if it can be arranged.

What sort of business do you expect from each broker in the alliance?

Cheers

Sorry, that should have said business levels at the end! Obviously the business is mortgages!!!

Indeed it is otherwise we are not only on the wrong forum but in the wrong job !

I think the financial risk is if the bank went under and didnt pay not so much the club. If the proc fee is collected from Woolwich for £1k and then gets credited and cleared on monday it will be sent on immediately. There are no employed people, compnay cars, expense accounts, expesnive offices nor lunches to be paid for hence WHY all the proc fee can be paid. 

Yes it would be great to have all lenders on board but as i have scratched beneath the surface it is dissapointing to see how the clubs and networks work in unison with the lenders. One of the mortgage clubs made £4.5m last year . Call me a nutcase if you want but i would prefer to see that money to spread across the advisers bank accounts. We have the hardest job of anyone - finding new clients- and i have never liked the fact that the moment we do find one others swoop down to share the spoils

Hi Martin

How can I go about a place on your "interested list".

Many thanks

Kealy

easy ! drop me an email at martin@london-money.co.uk and i'll ping you a quick 4 questions Kealy

I'm ouuut. 

Not trusting enough to send my monies to a new entity. I'll let it get established and then see