dispute with financial advisor

[dustythedolphin]

I am hoping someone might be able to give some advice:

I saw a mortgage broker in November. At the first meeting he arrived some 90 minutes late (I guess that should have ben a clue...)

At the first meeting he advised me that he is paid commission by the mortgage companies and that he would expect to be paid .5% of the overall value of the mortgage as his commission. On a £200,000 mortgage this would be £1,000. He said that if he obtained my mortgage and the commission from the mortgage company turned out to be less than the £1,000 he would be asking me to make up the shortfall.

I verbally agreed to this, as 1,000 as a proprtion of 200,000 seems reasonable.

I signed no agreement or contract with him.

During the past 2 months, the service he provides has been abysmal. He never responds to messages, does virtually nothing to progress the application and went AWOL for a whole month (early Dec to early Jan).

I have written telling him I no longer wish to use his service as I am unhappy with it.

He has sent me a very aggressive response, telling me he will be sending in a bill for his "substantial amount of time" spent on the application

Does anyone know where I stand. I am wooried he will send me a huge bill and take me to court if I refuse to pay.

Thanks :(

He's in difficulty, but provided you don't go with a mortgage he's arranged. If you go with a different mortgage he's not entitled to commission as he's not introduced you. If you go with one of his then I suspect he'll still get the commission from the lender but I wouldn't expect you'd have to make up any shortfall to £1000 as it doesn't seem like he's kept to his side of the bargain and provided you with an adequate service.
This is a regulated sector - might be the FSA but I may be wrong. Check to see if he's complied with all the relevant procedural requirements.

Don't worry, you have signed nothing, let him send his bill.

Did he give you any paperwork at all that outlined the serivce that he would be giving to you? He should have given you a statement outlining the service that he was giving, what you would be charged and when you should pay. The paperwork that he gave you should also tell you who you can complain to should you have a complaint against him (he should be registered with an organisation even if he is self employed).

TBH he sounds like an idiot, asking you for extra on top of the lenders commission is also not on IMO, there are other ways for mortgage brokers to make enough money without doing that, e.g by selling you a decent life cover product and getting the commission on that too (life cover and home insurance are nice earners for them).

If he gives you more hassle ask about for him to send you details of his complaint procedure, if he fails to do this then tell him you are going to report him to the FAS. Above all do not worry, one of the reasons mortgages became regulated by the FSA a few years ago was to give protection to customers from people like him!

I've used mortgage arrangers for years and not once have had a bill. The commission the advisor earned last time as £400 - this was paid by the lenders - and I've never been asked to top it up to £1000. I agree with the above advice, if you haven't signed anything, if he hasn't organised a mortgage for you and if you're unhappy with his service generally then just sack him.

Elsie: "Did he give you any paperwork at all that outlined the serivce that he would be giving to you? He should have given you a statement outlining the service that he was giving, what you would be charged and when you should pay. The paperwork that he gave you should also tell you who you can complain to should you have a complaint against him (he should be registered with an organisation even if he is self employed)."

No he didn't do any of those things. He is registered and I have contacted them to seek advice, they said he shou;ld have asked me to sign an agreement. They also gave me the number of the Financial Services Ombudsman.

I feel like writing back saying I have sought advice and am not liable to pay, but my Dad has advised me not to respond and let him send his bill and just ignore it, but IO am still worried I might end up in court or something

You have nothing to worry about. I'd have thought though that you should put your position in writing and leave it at that.

You definitely won't end up in court (if he tried he would get laughed at).

Your Dad is right though, let him send his bill. TBH I would be very surprised if a bill actually arrives.

If you do want to complain the organisation that he is registered with should deal with your complaint, not just fob you off to the FSA.

He is also probably blowing lots of hot air because he knows there is absolutely nothing that he can do.

Hi sorry I haven't been on for a couple of days. Just wanted to say thanks for your advice! :)

Dusty,

I used to work for a mortgage brokers (mortgage advisor and underwriter). Believe me when I say that they will never ever charge you for their service upfront. It will always be a "kick-back" from the lender, and also from the insurances that they have arranged for you.

If he contacts you again tell him to jog on. Don't use the firm, and don't take a mortgage out via them either.

Clearly they have no idea. People like them give honest brokers a bad name. (sorry it annoys me).

Me xx

Thanks Gonzo, I think he is pathalogically dishonest, as I know for a fact he only sent my application to 2 lenders and only followed up one of those applications.

He has since sent me an e-mail claiming the 2nd lender "has been slow to respond". I know for a fact he sent the form then didn't chase it up for 2 months!!! ie he called them some 2 months after sending it!

He has also left me messages saying he is "still working on it", despite the fact I e-mailed him telling him I no longer require his services. Obviously he is hoping to claim for his time.

I met him on 20 November, but called him twice beforehand, so he is claiming he has "done substantial work" for me dating back to August (just two brief phone calls...). When I met him on 20 November he was 20 minutes late.

I have met him twice since (the 2nd time after he went AWOL for a week and I turned up at his office to get my original documents back and he wouldn't send them back to me)

He is a complete liar fantasist.

Its hard to know whether to laugh or cry really!

Sorry that should hace read:

He tuned upo 90 minutes late

He went AWOL for an entire month not a week

If he tries to pressurise you further, stay very quiet and make sure he knows that you are writing down what he has said. Don't meet with him alone, have a witness. Either that, or tell him you're tape recording him. That'll shut him up. Tell him you're going to make a formal complaint about him to the FSA if he doesn't bugger off.

Trading standards say that if you're going to be paid for goods or services, that you should deliver them. It's a commonsense exchange. He hasn't provided the service, so he shouldn't be paid. And I think the others on here are right in that it shouldn't be you paying anyway - the financial institutions in question pay his commission on your acceptance of your mortgage offer.

He has no grounds for contacting you further, there is nothing in writing.

Thanks mm

I have e-mailed politely asking for a copy of the mortgage application and he won't even provide that