View more on these topics

Comment: Execution-only promotion is risky

Judging by the nature of the questions being asked of key participants in the mortgage market and the ideas being expressed in recent speeches, the FCA seems keen to expand execution-only sales process, reversing much of the good brought about by MMR in 2014.

We can all agree that where customers have the ability to input facts into a search tool without any interaction, this is not giving advice. However, where they actually need help to establish the answers to interest type, term, amount, LTV etc., as has been indicated in recent consultation, then this should not really be deemed execution only.

Our view is that MMR has largely been successful in ensuring customers that require help are guided towards an advised sales process and these specific rules do not require intervention or weakening. In reality this is a significant portion of the market. The extent to which objective factors are permitted is an important boundary that will define the risks facing consumers in making poor choices. The use and potential proliferation of help boxes and ‘bots’ should be monitored and if significant should transfer the application towards an advised route.

It is significant that the FCA paper makes it permissible to differentially price execution only mortgages, which will give direct lenders an unfair competitive advantage over those using intermediary only distribution. This cannot be fair in a market place that has been served so diligently by intermediaries for decades. The FCA’s role is to promote a fair market that works for consumers and our anecdotal research suggests that interaction with a qualified human being is a vital element for building trust and peace of mind; technology solutions and a polarised market will not be a good thing for maintaining trust and therefore a confident market.

Intermediaries provide choice of provider and product through an advised process which delivers precise consumer recommendations. There is a suggestion that brokers will be unable to consolidate their fees on some remortgage business because of the changes in the affordability paper and we believe this is a negative step. The delivery of choice and advice which this consultation suggests will do much to restrict consumers who will likely be offered limited options by single providers with the promise of speed and simplicity.

It will be a false economy and highlights the lack of protections for consumers under this approach which must be better explained if the proposed rules and guidance are adopted.

Gavin Earnshaw, compliance director, HLPartnership


Service that lenders provide clients direct is not one of advice, but of execution only

Having read about Mortgage Strategy’s Define Advice campaign in last week’s issue I feel somewhat contented that there is a suggestion that lenders dealing with clients direct should not be able to use the term advice. The service that lenders provide direct is nothing more than that of execution. Having worked for a retail bank […]

Ami calls for clarity on advised and execution-only product transfer figures

The Association of Mortgage Intermediaries has called on UK Finance to disclose the split between intermediated, advised and execution-only product transfer lending. UKF became the first to publish product transfer data last year, but does not reveal how volumes are split between advised and unadvised lending. In its latest economic bulletin, Ami also calls on lenders […]

Martin Lewis

Martin Lewis: ‘Abominable’ MAS deserved stay of execution

Chancellor George Osborne was wrong to axe the Money Advice Service despite it being guilty of an “abominable” waste of advisers’ money, according to Moneysavingexpert founder Martin Lewis. Lewis, who has been scathing of the MAS in the past and once described the service as “crap” to the Treasury select committee, says recent reforms had […]

Paul Smee MS blog

The future of execution-only

With the Mortgage Market Review firmly in place, there are now just two guns left in town in terms of sales process: advised and execution-only. While new rules have made advised sales the Magnum of the industry, execution-only may now be merely a water pistol. But can execution-only remain an important part of the industry? Non-advised […]

Health services

Challenges and opportunities

By Sarah Scott, marketing consultant On 22 February this year the charity Diabetes UK launched a fundraising initiative, #Swim22. They challenged individuals to swim 22 miles over the course of 89 days – a distance that equates to the width of the English Channel. Because of the time period the challenge is spread over, it […]


News and expert analysis straight to your inbox

Sign up

Why register with Mortgage Strategy?

Mortgage Strategy continues to be the market-leading B2B mortgage publication in the UK, and provides trusted, independent insight with the aim of helping, promoting and analysing the latest developments for mortgage professionals.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Mortgage Strategy Events
Be the first to hear about our industry leading conferences, awards, webinars and more.

Research and insight
Take part in and see the results of Mortgage Strategy's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now