End of year wrap up

It’s been a busy and challenging year with big changes in the way brokers do business. As the year comes to an end and we reflect on what has been achieved I think we can say that we have been successful in adapting to the changing scope of mortgage broking. Slowly we have adapted to new ways of writing business, complying with new legislation all the while continuing to service clients in the best way possible, which is something that can make you feel a sense of achievement.

We look forward to working with you in 2012 and although it will bring more challenges, it will also bring more opportunities and successes. If you are taking a break over the Christmas period, enjoy it! I would like to take this opportunity to thank you for your hard work, loyalty and contribution. Everyone at ALCo wishes you and your families a very safe holiday period.

Merry Christmas and Happy New Year!

Til next time,

Lesley

Fee for Service/Advice

I recently read an article about charging a fee for service, or fee for advice as it is also known, and the article brought up a good point – when do you tell the client that you charge a fee for your services?

There are two points to this question:

Firstly ASIC requires you to disclose fees upfront at the initial meeting. Section 158 (e) of the NCCP Act states:

The credit representative’s credit guide must:
(e)  give information about:

(i)  any fees that are payable by a consumer to the credit representative for acting as a credit representative; and(ii)  any charges that are payable by a consumer to the credit representative for matters associated with acting as a credit representative; and(iii)  the method for working out the amount of the fees and charges;

It is important you comply with this section to meet ASIC requirements and also to be upfront with the client.

This brings me to the second point. You have a responsibility to the client, they have a right to know that your advice will cost and decide whether to proceed. As broker services have been mostly free to clients in the past, many clients may not be expecting to pay a fee. It is important that you are clear from the get go.

You have a right to charge a fee and each broker will have their own fee structure to suit their business. Some may charge at levels of complexity, others by type of client. Regardless, mentioning fees upfront is very important.

It can be as simple as stating “I offer my initial consultation for free but once we discuss your requirements and I see the complexity of the loan these fees apply…”

If you have a website you may have a fee section, or have a flyer with your fees available in your office.

ALCo disclosure documents allow you to state your fee and how you calculate the fee. Even though you may have mentioned the fee during a conversation, be sure to put it in writing in these documents.

Do you charge fees? What have been your experiences with letting clients know about them and has it affected your business in a positive or negative way?

Til next time,

Lesley