MMR stymying industry online – CML conference told

FCA rules are preventing customers from getting a mortgage online with advice, Benjamin Morgan, senior product manager at Royal Bank of Scotland, has warned.

Speaking at the Council of Mortgage Lenders’ annual conference, Mr Morgan said the industry ran the risk of being left behind because of rules introduced in the FCA’s mortgage market review.

One of the changes introduced in the MMR was that non-interactive sales via the internet and post be “execution-only”.

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Meanwhile most interactive sales – by telephone or face-to-face – should be advised.

Mr Morgan said: “The tide is turning and we cannot afford to be left behind. While the regulator’s intentions are noble, we as an industry cannot afford to be oblivious to the fact that the web will be the one preferred platform.

“It is clear an opportunity has been lost to rebuild customers’ trust, so let us work together to make a great advised mortgage journey that protects customers.”

Andrew Montlake, director of London-based mortgage broker Coreco, addressed the conference about the importance of engaging with customers online.

He said: “A lot of brokers have been quick to seize the initiative and go to social media. We use it as a social brochure, somewhere to provide special offers and post content.”

Mr Montlake was taking part in a debate on the role of “digital in a demand-led world” with Karen Prodger, business development director at Barclays.

She said lenders can use digital technology to make “more transparent” where a customer is in the mortgage application process and what happens next.

Meanwhile, Dan Rudd, senior vice-president of client services at Quantitative Risk Management, told the conference that mortgage interest rates in the UK were higher because of the lack of a sovereign guarantee.

He said having one would “make a lot of sense”.

Adviser view

Nottinghamshire-based IFA Richard Bond, of Opal Financial Management, said: “From my personal experience the majority of people still find face-to-face financial advice far easier and they feel more of a sense of trust if they have met someone.

“Although the initial contact and research now will be done online, and that helps us do our job, there are still an awful lot of people who prefer to meet someone face-to-face.”