This is a worrying development, affecting the independent mortgage advice process and potentially having serious implications under the Financial Services Authority’s Treating Customers Fairly initiative.
I am aware that some lenders, if they cannot assist customers, have arrangements in place with whole of market practitioners who can look into whether the needs of aspiring borrowers can be accommodated elsewhere.
But this move is being portrayed by HSBC in such a way as to make the lender seem both a single product provider and whole of market operator, with this being a key selling point of its high street proposition.
Taken to its logical conclusion, all the lenders on the high street will be doing it.
While there are conflicting reports about how the scheme will work, it seems likely that there will be John Charcol advisers in HSBC branches.
So it appears that on entry to a branch – and possibly in national press and TV advertising campaigns too – this will be presented as what might be called a ‘we can fix it’ service.
In future there would be two types of in-house adviser in HSBC branches – one working directly for the lender and one operating across the market.
How can the FSA stand by and allow HSBC to drive a coach and horses through the advice process? It will confuse the public and can hardly be described as being in the spirit of TCF.
Is HSBC a single product provider or is it whole of market? It can’t be both.
If this sort of thing is allowed to become a trend it could destroy what is left of the independent mortgage broking sector and concentrate power even more into the hands of the big lenders that remain in the market.
This move must be resisted by both the Association of Mortgage Intermediaries and the FSA. It is a Trojan horse that could leave customers at the mercy of big organisations.
I can only imagine that John Charcol understands what it is doing and is prepared to be seen as the pariah of the market.
The Mortgage Practitioner