The FSA is consulting on whether it should place requirements on firms in the mortgage market who choose to call themselves 'independent' and 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 says the issue is linked to its work on general insurance, polarisation and product disclosure in the investment market. Independence in the mortgage market simply means that the firm is not tied and acts on behalf of the consumer. A firm could in theory deal with a limited number of lenders and still call itself independent and may or may not offer advice.
A spokesman for 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 shorthand for providing 'whole-of-market' advice. No such definition exists in the mortgage market.”