Should I pay a fee for mortgage advice?

Q I want to change my mortgage and contacted an independent financial adviser who charges ?540, offset by any commission from the lender. The adviser says that this makes him truly independent as all the costs are covered. Is this true or should I go to another IFA who gets paid from the commission only?

NT

A Independent financial advisers work in one of two ways - they either charge a fee or they are paid commission by lenders. Many people feel the only way to guarantee truly independent advice is to pay a fee for it, as this ensures the adviser is not motivated to recommend a product just because he will earn commission from the lender as a result.

If you consult a commission-based adviser, he will recommend a mortgage for you from a panel of lenders selected to represent the mortgage market as a whole, though it won't include every lender in the UK. The benefit to you is that it won't cost you anything in adviser's fees, though you might still be charged an arrangement fee by the lender.

So your choice comes down to this - do you want to pay a fee for a recommendation that will take into account pretty much every loan available, or are you happy enough with a choice being made from a narrower selection of loans which are still representative of the market?

You could always do a bit of research yourself beforehand - check out mortgage deals on Moneysupermarkt.com, for example, just to see what's available - then see what a commission-based adviser comes up with. If you don't like his recommendation, you can simply go elsewhere.