application fee still with the promise of the lending being agreed. “It is only once this is paid that the client is then infor med that the lending has been de- c lined and the fee is non- refun dable,” he adds.


Stott says the key to being a


trusted lender is to be as open and trans- parent as possible to allow clients to make in formed decisions on


how to proceed. “From an ad viser’s point


bridging sector that has struggled with its reputation over the years. Since 2007 anyone associated with financial services has been only too aware of the negative connotations that spring to consu mers’ minds when banks or len ders are mentioned. The way consum ers feel about finan- cial services is the lowest it has been in a long time. Indeed consumer confidence as a whole is at a low. Nationwide’s Con- sumer Confidence Index now stands at 37 points below its long-run average of 77 and is seven points lower than the same point last year. Distrust in the industry obviously doesn’t help this and if consumers believe they are being deliberately fooled it's only going to get worse. “The financial services industry has had a terrible reputation for not making information clear enough to clients,” says James Stott, director of Bury St. Edmunds-based Abbeygate Wealth Management.


“Bridging loans are often advertised as being easy to get with little or no charges and yet the client is normally then asked to pay a ridiculously high


The


of view we need to know that the lender we recommend will deliver as


it has promised and will not put us in a situation where we are told one thing and the client another once they pro- ceed,” he adds. “This is embarrassing and calls our


reputation and advice into question.” While complicated upfront fees and small print charges may seem like an additional income stream for some bridging lenders, it is clearly not a feasi- ble long-term policy. “We would definitely never recom- mend or consider using a company that requires upfront fees,” says Stott. “I cannot imagine any reason for a lender to take an extortionate upfront fee just to get an agreement in principle. Fees should always be paid upon com- pletion.”


Scott knows how important keeping


brokers happy is and says that's what the lender strives to do. “If they like us, and they like what we


say, they can go back to the customer and say ‘Here you are, this is what you’ll pay’. There are no extra costs and fees in the transaction. You pay a single rate and that’s it – it's easy for them to explain to the clients.”


 guide to Bridging Finance 2012 23


GUIDE TO BRIDGING FINANCE


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