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.”