From: "Andy Pandy" 
Newsgroups: uk.finance
Subject: Re: brokers vs direct
Date: Sat, 31 Dec 2005 18:36:05 -0000


 wrote in message
news:1135904104.995014.84500@o13g2000cwo.googlegroups.com...
> I used to think that if you want mortages, insurance, etc. you're
> better off asking the lender/insurer directly for quotes, cutting out
> the middleman and his glitzy office overhead. But I've also known that
> brokers sometimes get special deals by being able to buy in bulk and
> resell. So does that mean that if I'm looking for the best deals I
> should also try asking brokers for quotes as ewll (as many of the
> thousands of them as I can, anyway)?

With most products you don't save anything by "cutting out the middleman" and
buying directly, if the product you are buying is usually sold by middlemen
(agents/brokers). This is because the product provider is not going to undercut
their agents, as the agents then won't sell their products and they'd lose most
of their business. People would quickly realise that the thing to do is go to an
agent/broker and get them to find the best deal - then buy direct!

That's the main reason why going direct is rarely cheaper, nothing to do with
buying in bulk. The exceptions are companies which make a point of selling
directly, not via agents, eg Direct Line, Direct Holidays etc.

A way round this is to find an agent which refunds some/most of their commission
to you - this works well with ISA's/unit trusts/pensions etc, not sure about
mortgages/insurance as there's less commission.

FWIW my experience with "mortgage brokers" is they are more interested in
selling you insurances you don't need than finding you the best mortgage, but
that was 6 years ago, things have probably changed since then.

--
Andy