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Treasury advice definitions are &#39final&#39

The definition of advice in the consultation draft of the Regulated Activities Order is final, says the Treasury.

Strategic or generic advice will not be regulated following the format for investment advice and only advice on the merits of a particular mortgage will be captured.

The Treasury registers the concerns of respondents who sought greater clarity between advice and information. It says that merely “matching the consumer&#39s preferences and expectations to the products available” is not defined as advice, but that it will nonetheless be caught by regulatory provisions for “arranging”.

Brokers have welcomed this clear definition. Patrick Bunton, head of operation and compliance at London & Country, says: “We are pleased to see that Treasury envisage the definitions of advice to be the same for mortgages as for investment business.”

Mike Fitzgerald, sales director at Brentchase Financial Services, says: “The smoke is slowly being lifted. It is simple and, now the rules are defined, they will become very easy to follow and stick to.”

Trevor Youens, director of Reading-based Flower Independent Financial Advisers, says: “It is good that the rules have been made clear, but it a question of how brokers implement them. Fully qualified IFAs such as us will not find the issue of mortgage regulation too much of a problem because we are already doing almost all that we need to do. One-man mortgage broker bands will find it hard.”


FSA extend guidelines on training and competence

The FSA has proposed that guidelines on training and competence previously set down for lenders will be extended to all firms which advise on or arrange mortgages. The FSA has already set out its approach to training and compliance in the Training and Competence Sourcebook, which includes commitments to maintaining reasonable levels of responsibility and […]

Staffordshire launches new discounts

Staffordshire Building Society has launched two new discount mortgage products, with rates starting from 3.79% for two years The first product is a straight 1.95% discount rate off the society&#39s standard variable rate – currently 5.74% – for two years, making a pay rate of 3.79%. The product comes with free accident, sickness and unemployment […]

FSA draws line between &#39advice&#39 and &#39non-advice&#39

The FSA has identified three types of sales process in the mortgage market. These distinguish between advice and non-advice, and as such will attract different regulatory responses. The three sales processes are: advised sales &#45 here, the FSA proposes to use the definition of advice set out in the legislation, that is, advice on the […]

Consistent regime wanted

The Treasury has responded to broker demands for more consistent regulatory regimes by agreeing to explore the links between CP121 and mortgages, writes Harriet Williams.The government admits that the finalising of mortgage regulation ahead of changes to the polarisation regime is “unhelpful timing”. But brokers say the FSA will have enough time to take account […]


Employer iPMI responsibilities could continue to escalate, says Jelf

New laws in Dubai will put the burden of providing international private medical insurance (iPMI) firmly on the shoulders of the employer in order to maintain the country’s leading healthcare facilities. With 10,000 UK nationals having moved to the country since 2007 and only 16.5 per cent of the total 8.2 million people living there being Emiratis, Jelf Employee Benefits believes this move was inevitable and employer responsibilities could continue to escalate in future.


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