Execution-only service is no excuse for bad advice

I am sure many advisers would agree with Gavin Hilton last week (Mortgage Strategy, Letters March 29) when he stated that banks’ service is not one of advice, but execution only.

But one of the examples quoted was where a bank mortgage adviser sold a two-year fixed rate when the client’s needs specifically necessitated a three-year deal.

Hilton goes on to say that banks, because of the pressure their staff are under, are never going to give clients advice that means they won’t do the deal.

I think we all agree that this is probably the case, but it is not an advised versus execution only sale issue – it is much more sinister than that.

Execution only is one thing, but bad advice and flouting the rules is quite another. Remember, regulated entities are obliged to whistleblow

In fact, the Mortgage Conduct of Business rules state in section 4.7.12 that “Where the scope of the advice provided is restricted the assessment of suitability should not be limited to the types of regulated mortgage contracts which the firm offers. MCOB prevents a firm recommending the ’least worst’ regulated mortgage contract where the firm does not have access to products appropriate to the customer’s needs and circumstances”.

Execution only is one thing, but downright bad advice and flouting the regulator’s rules is quite another. It should be remembered that regulated entities are obliged to whistleblow where evidence of such activity is discovered.