The FSA is consulting on whether it should place requirements on firms in the mortgage market who choose to call themselves 'independent' and, if so, whether this should apply to both advised and non-advised sales.
It also considers whether firms should adopt a different status in relation to different regulated products, for example, being independent for mortgages but only selling investments from one product provider, and whether firms should be able to change their status when dealing with different types of consumers.
The FSA believes this issue is closely linked to its work on general insurance, polarisation and product disclosure in the investment market. In its consultation paper on regulating mortgage sales, the FSA says: “When choosing where to go for information or advice, consumers need to be aware of the number of lenders and products that will be assessed. In the investment market, 'independence' is used as a convenient shorthand for providing 'whole of market' advice. No such defined term currently exists in the mortgage market. We have considered the merits of defining independence in the mortgage market in the same way as for investment business.”