CCR Magazine

You are here  :Home arrow News arrow Charging percentage fees for equity release 'not TCF', say JLM Mortgage Services
Contact Us Newsletter Signup RSS Feeds

Latest News Headlines


Commercial Credit News


Charging percentage fees for equity release 'not TCF', say JLM Mortgage Services PDF Print E-mail
Tuesday, 28 November 2017
JLM Mortgage Services, the mortgage and protection network, has today (28th November 2017) suggested the charging of percentage-based advice fees on equity release products is not in the ‘spirit of Treating Customers Fairly (TCF)’. 

The advisory practise and mortgage network says it has seen clients of other equity release firms having to pay between 2-4% in fees, based on the loan amount, which can cost many thousands of pounds depending on the size of the loan, plus the adviser will also pocket a procuration fee on top.

It believes there is no reason why equity release advisers should not be charging a fixed-price for advice – JLM’s equity release advice fee is currently £1295 – and argues that only on, what it terms, ‘ultra complex’ advice work should a percentage fee be charged.

JLM has voiced concern that potentially vulnerable customers might be unaware of the level of fees that are payable in such a situation, and wants to see further education of potential borrowers around the equity release fee options that are available.

JLM Mortgage Services is an authorised network offering both experienced and new AR firms access to a range of mortgage lenders and protection providers, with a full range of services and complete compliance coverage.

Rory Joseph, Director of JLM Mortgage Services, added: “The practise of charging an equity release client a percentage-based fee for advice certainly doesn’t seem to be within the spirit of TCF, and we would go so far as to say it is profiteering. Fees charged at a percentage of the loan are not suitable for equity release advice; indeed we would suggest they are only suitable for ultra-complex work, which quite frankly equity release is not. We recently had a client where their lifetime mortgage loan amount was in the hundreds of thousands of pounds, and still they only paid £995 for the advice. If they’d gone to an adviser that charged a percentage fee, they could have been looking at a fee of £10k-plus. That can’t be right – the fee should be commensurate with the work involved and no equity release adviser is carrying out £10k-plus of work.”

Sebastian Murphy, Head of Mortgage Finance at JLM Mortgage Services, commented: “Most advisers active in the equity release market charge a fee for advice, and given the nature of the product and the work involved, that is fully understandable. However, just because this is accepted practise, we as an industry should not be charging potentially extortionate fees based on a percentage of the loan. Somewhat ironically, this is not an issue with procuration fee levels – as most lenders active in equity release pay similar amounts – but adviser charging. We appreciate that different adviser firms run different models, but still there is absolutely no reason why any equity release customer – who could, let’s not forget, be quite elderly and vulnerable – should be paying thousands of pounds for their advice. It’s wrong and it’s not treating customers fairly – we need to educate the public that they are not beholden to these firms and that quality alternatives are readily available.”

 Forums International Ltd

Forums International Ltd

 Attendance at your first meeting is free of charge, and please quote reference 'CCR2016' to receive the special 10% discount off of your first annual subscription.

Find out more here.

latest issue

CCR Cover

The latest edition of CCR Magazine, the leading editorial publication in the UK credit industry, is out.

Read the latest issue online


CCR is the premier magazine for consumer and credit professionals. It provides an independent voice to the industry, breaking major news stories and running in-depth features.

As a magazine, it works with and campaigns on behalf of the credit industry to promote its importance as a centre of potential profit and business development to the wider business world.

Subscribe to CCR Magazine

CCR World Magazine


Providing information and analysis for thousands of senior credit professionals worldwide, every quarter.

Find out more

GTS Media Ltd
81 Cambridge Road

Registered in England No: 05483197