MIp9-10_1009.qxd 23/9/09 17:11 Page 3
Fees vs. commission | 9
To fee or
not to fee?
TMA’s Phil
Whitehouse
considers the
thorny issue
of fees versus
commission
T
o fee or not to fee. That is
the question on the lips of
mortgage brokers up and
down the country. This topic
has been simmering for
some time now and in light
of the upcoming Mortgage
Market Review document from the Financial
Services Authority - which is widely expected
to rule on whether charging fees should be
mandatory - the debate about the best way to
offer advice has almost reaching boiling point.
Historically the broker market has been
dominated by income raised from lenders'
payment of procuration fees. This proc fee cul-
ture has made brokers reasonably comfortable
in their business models as these commission
earnings were sufficient enough that they didn
’t have to charge their clients a fee for their
u
t
i
o
n
s
services. Then came the credit crunch and the
resulting reductions in lending volumes and
the size of the market from £364 billion in
I
s
t
o
r
i
c
a
l

S
o
l
2007 to £280 billion in 2008 and the forecast
of £145 billion in 2009. T
a
r
t
s

H
e

The outcome of subsequent funding issues
T
i
m
and attitudes to risk is that lenders have
www.mortgageintroducer.com October 2009 Mortgage Introducer
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