Regulate branch staff like brokers, says AMI

The Association of Mortgage Intermediaries has called on the Finan-cial Services Authority to apply the same regulatory standards to in-branch advisers that mortgage brokers are subject to.

In its response to the regulator’s Mortgage Market Review discus-sion paper AMI says it is critical for the FSA to level the playing field between brokers and branch staff when it comes to the regulation of sales processes.

The trade body cites product sales data published by the FSA last August which revealed that 90% of all mortgages sold by brokers were on an advised basis compared with 38% of those sold direct.

AMI then compares this with research by the Financial Ombudsman Service for 2008/09 which shows that brokers accounted for just 24% of mortgage complaints compared with 58% of complaints generated by banks.

AMI argues that on this basis direct branch sales should be subject to the same affordability and suitability requirements as brokers.

Robert Sinclair, director at AMI, says: “HSBC and First Direct are both in the non-advised space and I am not convinced that non-advised sales are the way to go for first-time buyers.

“This begs the question whether mortgage rates available via the direct channel are cheaper because sales are non-advised.”