Yesterday the Indo had a front page story about brokers and estate agents could potentially ‘rip-off’ customers. This obviously affects the whole industry because it means that brokers and estate agents in general are sullied in the process and obviously the article was highly upsetting for many, but that doesn’t mean it was not fair and balanced.
It is especially difficult for any broker to stomach reports that say their industry is guilty of wrongdoing, but the actual solution must be for broker to be the most vociferous proponents of ensuring an investigation is completed and we must also lobby for strong retribution to any firm caught doing wrong if we are to be taken seriously by consumers.
The danger as I see it is that anything short of harsh punishment will only send out the message that yet again there is a ‘financial firm getting away with it’. The Financial Services Ombudsman’s most public moment was when they failed to have a judgement against Davy Stockbrokers adhered to in the High Court costing the tax payer hundreds of thousands and causing significant embarrassment to the Ombudsman, industry read into that as ‘a good barrister will get you off anything’, but that is not the right message or one that can be allowed to develop within the financial community.
Two years ago Tom Lynch (Property Regulator) had a coffee with me and he asked me about any areas of concern I had regarding mortgage brokers or property agents, the first thing I said and what was repeated several times was that I felt brokers and estate agents should not be allowed to wear two hats or to have brokerages that are owned, even in part, by estate agents. The ‘lead passing’ between them alone means that customers are often not getting a chance to consider all of the pros and cons. It is no coincidence that the largest brokers in the country are partly (or almost fully) owned by Estate Agents.
Often in smaller towns there is not enough business to support an independent broker as well as an estate agent and for that reason the two often merge. However, the firms under investigation are not small town firms, instead they are the the largest firms tied to the largest estate agents, something that of itself raises suspicion in our mind.
Many feel that you need an estate agent partner to build a successful mortgage brokerage. Irish Mortgage Brokers has twenty five consultants and no estate agent owns a single share in the firm, and we are not tied to any estate agent either. The same goes for REA mortgages (another large city broker), you won’t find many people plugging competitors but we are happy to help direct people to ‘actually’ independent brokers.
Remember, you can use the term ‘independent’ based on the number of agencies you have, but the only way to get truly independent advice is to never use the brokerage attached to or owned by the estate agent you are using. Also ask for a firms privacy statement, ours is published on our site but it is vital in a digital age that you cover all bases.