Since April, this magazine has carried many stories stating that the Mortgage Market Review will benefit brokers and will result in more borrowers using the services of an intermediary.
If there was ever a story to prove to consumers the value of seeking independent mortgage advice from a broker, then it was Royal Bank of Scotland’s £14.5m fine for poor mortgage advice.
Some of the revelations were quite shocking.
Out of 164 sales from 2012 reviewed by the FCA, only two were considered to meet the required standard.
Not only were RBS and NatWest advisers failing to consider the full extent of a customer’s budget when making a recommendation, but they also failed to advise what mortgage terms were appropriate for them.
Add to this that their advisers were offering personal opinions about when base rate would rise and you have one almighty mess – even if the FCA said there was no sign of consumer detriment.
Some may argue that this was pre-MMR and so it is harsh to judge these advisers retrospectively. But these were very serious failings and the final MMR rules were published in October 2012, meaning the market had a fair idea what the new environment would look like, after numerous consultation papers, while this poor advice was being doled out.
Hopefully, these issues have now been sorted.
More widely, banks are struggling to offer advice in the new regulatory landscape with many making borrowers wait for weeks to get an appointment that will then take three hours.
All of this plays into the hands of brokers. And it should do as brokers are – and always will be – the best place to find sound mortgage advice.