Consumers ignorant of IFA mortgage role

It appears that many people are unaware of the role of IFAs in providing them with mortgage advice.

The lender edeus carried out research that showed almost 60% of consumers would go to their own bank or building society, or a mainstream lender, for mortgage advice.  Only 40% would use a professional mortgage adviser or IFA.
Of those opting for a high street lender, 26% said it was due to the wider range of mortgages available, 21% said it was easier than using a broker or adviser, and 18% said it was because their bank or building society already knew about their personal financial history.

In addition, 14% believed that they would be offered a favourable rate by using a mainstream lender and 12% said they opted for a lender because it had a well known brand name.

The survey also revealed the huge confusion over the advice services provided by both mainstream lenders and intermediaries.

•    78% didn’t know that mortgage intermediaries could provide access to mortgage products that were not available directly from a lender
•    43% did not know that the high street lenders would only provide advice about their own mortgages
•    35% of people thought that mortgage intermediaries and IFAs always charged a fee
•    20% didn’t understand how the process of using a mortgage intermediary actually worked

Nicola Severn, spokesperson for edeus, says: “We know from lending statistics that the majority of borrowers come via the intermediary route, but these findings clearly show that there is sub section of society who is confused about the role intermediaries play.

“With huge marketing budgets, and a high street presence that mortgage intermediary firms are unable to match, it is no wonder that mainstream lenders are able to persuade consumers to visit their branches”