It is always nice when one of the good guys in the industry drops you a line over the weekend asking for a second opinion on something that one of their clients is about to do.
This happened recently to me when Chris Budd dropped me a DM on Twitter about a long established contact of his who was looking to raise some finance.
Would I mind having a look and giving a second opinion Chris asked? Well, is the Pope a Catholic was my immediate response! Not with any particular desire to try to win some business, more from a professional, altruistic approach. On many occasions I have said to someone what they are doing is perfectly fine and they certainly don’t need me to get in their way.
But, on this occasion, I got in the way and a good job we did as it not only helped save the client £4000 in fees, but we got to realign their expectations which had been allowed to become totally out of kilter with what was actually possible.
The client that Chris referred over wanted to borrow to purchase an office. Turned down by their main bank (who HASN’T been turned down that way) he was then passed to another broker who suggested a second charge to sit behind his main mortgage. So far, so good advice. But in the email the client mentioned three things which stood out:
He was being charged over £5000 for the work to be undertaken
He assumed after his conversation with the broker that it would be a fairly straightforward process to raise the money
He was looking for a third party to verify the “small company” he was borrowing from.
Addressing these in order, we all understand to need to be commercial but we also need to be sensitive to when that crosses over to becoming mercenary. We figured a fee of £995 would be sufficient to do the same job that someone was suggesting was worthy of a fee 5 times that figure. It always pays to get a second opinion on a fee which you think might be too high.
Secondly, and this is where we address the realignment of the clients thinking, he was never going to be in a position to do what he originally set out to do. Ever. It would have been a complete waste of everyone’s time, effort and money. Did the broker not know this? Do we really need to educate some in the industry that turnover is not income when it comes to borrowing? That’s pretty basic stuff really.
And the final point, to me at least, was the most interesting. The “small company” the client was referring to about borrowing the money from was in fact the middle man that was arranging the loan. Not the lender itself, who is a well established and big player in their field. Is it any wonder therefore that the consumer can still be hoodwinked in to scams when to us the process seems transparent but to them it appears opaque, complex and daunting.
So I am glad Chris thought to involve me in the process and I think Chris is too as, in his own words, the client is a “really nice guy”. But I’d like to think the client is the one who took away the most from this exercise. In the space of three weeks we helped change his thinking, put him on a different and more suitable path for his circumstances and we did it all for a price that was not only fair to him as a consumer but fair to us as a business.
We all like quick wins but nothing beats a win/win.
Martin is the founder and driving force behind London Money & The Money Group. Now in his third decade of working in financial services, clients benefit from his wealth of experience and intimate knowledge of the mortgage market. Martin specialises in giving independent mortgage advice in London and the South East, to people moving requiring any form of finance. You can follow him at @LondonmoneyFS