Brokers don’t have to charge fees for independent label

Mortgage brokers will be able to call themselves independent even if they do not charge a fee for advice, under Financial Services Authority proposals.

In its Mortgage Market Review distribution and disclosure consultation paper, the regulator says it may scrap the rule that a firm must charge a fee to call itself independent.

The move is part of proposals to apply ’independent’ and ’restricted’ labels to all firms in the mortgage market.

The FSA says the fee should be dropped because it found no sig-nificant evidence of commission bias in the mortgage market and brokers can still be independent even if they rely on commission.

Its paper says: “We are conscious that in the mortgage market there are a number of products that can-not be accessed by all firms or products only available through special deals between lenders and intermediaries.

“We propose to specify that a firm’s search does not need to extend to these products to use the label independent.”

It also says it does not see any merit in moving to an all-advised market and brokers will still give both advised and non-advised sales.