View more on these topics

FSA denies it is planning cascade system probe

The Financial Services Authority has denied it is planning to investigate cascade systems, but says it continues to watch all as-pects of the mortgage advice process.

Speculation had been rising within the in- dustry that the regulator was looking closely at how lenders’ cascade systems interact with its Treating Customers Fairly initiative.

This follows concerns from all parts of the industry that cascade systems could be misused by lazy brokers.

Michael Clapper, chief executive officer at Enterprise, says: “I have heard whispers that the FSA is looking at cascading and trying to get a better understanding of practices in the market. These systems can be a dangerous way for brokers to get to products easily, and it doesn’t take a genius to see it’s a question of when not if the FSA takes an interest.

“I imagine it will recommend strong measures to prove that brokers aren’t being lazy.”

John Rice, managing director of the Regulatory Alliance of Mortgage Packagers, agrees that cascade systems could be at odds with TCF and that this is a concern for the FSA and the industry alike.

Robin Gordon Walker, spokes-man for the FSA, says: “We are in constant dialogue with intermediaries concerning what we expect and require, including through our suitability of advice rules.

“Firms should follow these whether the business methodology they use involves cascading or not.”

But he adds that although the FSA monitors all the areas it regulates there will not be a full investigation.

Linda Will, managing director of Accord Mortgages, which launched its cascade system at the beginning of the year, says several brokers have expressed concerns to her about lazy brokers using cascading irresponsibly. But she says there are few alternatives left for lenders.

She says: “What would lenders do if they couldn’t cascade? This is a useful tool for brokers.”


Scottish system is best, say experts

Implementing the Scottish house buying system in England could have a greater remedial effect on gazumping than Home Information Packs, say experts. Although HIPs are being championed by the government as a way to protect consumers from speculative sellers and cut the incidence of sales falling through, some in the industry believe overhauling the legal […]

Brokers don’t expect to pay World Cup penalty

Over half of Mortgage Strategy Online readers last week voted that the World Cup would have no effect on their business. Just 43% thought it would. Whether hunting for mortgages and houses wins out over flat screen TVs and booze, only time will tell. This week Mortgage Strategy asks: “Do you feel confident about Home […]

FSA sets out GI review

The Financial Services Authority has today set out further details of its post-implementation review into the effectiveness of its general insurance conduct of business regime. The review is being conducted in line with the FSA’s move towards more principles-based regulation and with its commitment to the Better Regulation agenda.The effectiveness review began this year and […]

BDM for InterBay

InterBay Funding has appointed another business development manager. Jamie Breathwick joins from the Royal Bank of Scotland Group where he was a BDM for four years.

The curse of long-term cash

Trevor Greetham, Head of Multi Asset at Royal London Asset Management, reveals why clients should be seriously concerned when short-term holdings of cash turn into a long-term investment. There is nothing wrong with holding wealth in the form of cash on a short-term basis. For many people capital stability is important and access to ready cash […]


News and expert analysis straight to your inbox

Sign up