FSA puts advice at risk when it hikes intermediary fees
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I was not surprised to read that the Financial Services Authority is increasing its fees for mortgage brokers.
The reason for this is that yet again it seems the regulator is acting as a sort of anti-Robin Hood - robbing from the poor and ensuring the rich stay, well, rich.
We read in the trade press that 61% of financial services complaints are against banks and 2% against IFAs. By my maths this means banks’ fees should go up by 1,006.5%. I doubt this will happen.
The intermediary mortgage market is a lot less risky now than it was in 2007 as we don’t have self-cert, adverse deals or 90% LTV buy-to-let products anymore so surely fees should be falling.
To be fair, the government is making some speedy changes. One Tory pledge was to get rid of the FSA and its death cannot come quickly enough.
It is my fear that hiking fees will cause advisers to trade without protection which would be counter-productive, generating more work for the FSA and risking advice to consumers.
We need to start putting customers first again and simplify regulation to ensure the cost is kept at a reasonable level.
I accept there is a need for a regulator as it gives reassurance to clients and makes for a transparent mortgage arena. But people voted for change in May and here’s hoping we get it.
I believe that things happen in threes and we’ve already had one good news story with the demise of Home Information Packs.
New lenders coming to the market is good news story number two so number three could be a new regulator. Here’s keeping everything crossed.
ROBERT WINFIELD
MANAGING DIRECTOR
CHARTWELL FUNDING
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