Watchdog rules different rates 'fair'

  • Story by: Catherine Couch
  • Magazine: MortgageAdviser
  • Published Wednesday , May 14, 2008

Offering different rates directly to customers than to advisers is fair practice, according to Hector Sants, chief executive of the FSA.

Advertising

Speaking at the Building Societies Association annual conference in Manchester last week, Mr Sants said he had been approached by a number of advisers asking whether the increasing instances of cheaper rates being offered direct was fair under treating customers fairly.

He said: "Our response is lenders are not obliged to deal through advisers. How they choose to price and distribute their products is a commercial matter. There have always been certain lenders who choose not to offer their products through advisers."

Mr Sants said there had always been examples of lenders who had differentiated on pricing depending on the channel such as offering exclusive rates to certain mortgage clubs or through interest only offers.

He said: "It follows from this that not every product on the market will necessarily be available to any one adviser, something which our definition of whole of market takes into account.

"If certain lenders decide to offer their direct customers cheaper deals, we do not see that customers’ best interests would be served by preventing this."