Mortgage lenders do not want a “row back” from the rules introduced by the Mortgage Market Review and said the regulator should be actively ensuring advice is available to all.
That was the message from a panel of representatives at the Financial Services Expo earlier this week (September 11), who argued the importance of advice was as important as ever.
The FCA proposed a shake up of mortgage advice rules in May designed to increase access to execution-only products. The watchdog thought consumers were being "unnecessarily channelled" into advice and still not necessarily getting the best deals.
The regulator proposed to change its guidance to indicate that a tool which allows a consumer to search and filter based on objective factors, such as interest-rate type and term, was not necessarily giving advice.
The watchdog had also proposed changing the ‘trigger point’ for advice to exclude interactions that are unconnected to regulated advice, including support with an application or ongoing case management.
But some advisers called the FCA's statement a "complete u-turn" from its previous stance on advice as set out in the MMR published in 2014, which said giving generic information could amount to giving regulated advice if it steered the customer towards one or a group of mortgages.
Chris Pearson, head of intermediary mortgages at HSBC, said the market didn’t want to see a move away from the MMR while Adrian Moloney, sales director at One Savings Bank, thought advice was key given the “minefield of different products and options out there for borrowers”.
Though he did concede the changes would provide a “greater deal of certainty” around the advice rules and “clear indicators” of what it would mean for the industry.
Meanwhile Lloyds’ director of strategic partnerships, Esther Dijkstra, argued the Financial Conduct Authority’s focus on price over other measures should “continue to be challenged by the industry” and that the regulator needed to be “convinced otherwise” on this topic.
Asked what brokers could do to develop their future advice offerings, Jeremy Duncombe, director of intermediaries at Accord Mortgages, urged advisers to use technology to do the “hard work”.
Mr Moloney thought advisers should engage with mortgage clients “through the life” of their policy — rather than waiting until the three months before the end of a deal — while Andy Dean, of Nationwide Building Society, suggested advisers looked at more specialist areas which were showing “resilience and growth”.
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