Didn't know how their adviser earned money with respect to the mortgage they discussed

Confidence in your structure. Be confident explaining any explicit costs as well as how you’ll get paid from lenders up front. Obviously don’t start your conversation talking about how much you’re going to make from your client, but it’s best to have the conversation early on so that your client feels you’re being open.

Transparency. There’s a lot of work that goes into arranging a mortgage so ensure your client knows what you’re doing on their behalf. The more they understand about the work you do, the more accepting they’ll be of any fees you receive.
Procuration Fee. Explain that virtually all providers pay a procuration fee, and this doesn’t affect the mortgage rate they receive.

Fee comparison. If you also work by fee, give your client a comparison so they can see the differences and make an informed decision on which way they would prefer to work with. you. Include in the explanation that there may be some rates they can only access via fee as the lender doesn’t pay a procuration fee. Whilst your client may not be interested in paying a direct fee, they’ll feel better understanding that this was an option and what effect it could have on the available mortgages.

Clarity through examples. Be clear when you get paid (i.e. when the mortgage draws down, or the payment schedule if working by fee) and what happens if the sale falls through. Give some examples up front based on your client’s circumstances.

Reiterate expected costs. When you decide on the final mortgage product, ensure you go through the procuration fee, or direct fee, you’ll receive as a result or arranging the mortgage for your client.

Make a point to your client that it’s OK for your client to ask questions about any of the fees or charges at any time, including how you get paid, however...

If your client does ask a question about how you’ll get paid, schedule a meeting, or call, to specifically re-explain how you’re remunerated. You’ll get questions for one of two reasons:
- Your client doesn’t understand
- Your client isn’t comfortable with how you’re getting paid, or the amount

Either reason should be a red flag that there’s an issue which needs to be addressed. Take time to re-explain how you’re paid and by whom – it’s better to invest time here than deal with a future complaint!

Repeat back. Test your client’s understanding by getting them to tell you how you’re paid, by who and when.
- A good way of doing this could be using prompting.
- Say to the client “so just to recap on the fees and charges of this mortgage, you went for X which carries an initial fee of…” then pause for the client to answer. Then use the same technique for your fees by saying “and in terms of my fee, that is…” pause “which is paid by…” pause “but this is only when the mortgage…” pause.
- If they’re not sure, take the opportunity to explain again.