The Financial Services Authority’s latest missive, following up on its Mortgage Market Review discussion paper, makes for interesting reading – particularly the proposal to make individual mortgage advisers accountable to the regulator.
This is something of a U-turn by the FSA given that it chose not to individually monitor advisers when regulation was introduced.
This decision seems like common sense, with individual advisers having to prove they are fit, proper and accountable when it comes to advising consumers.
Many rogue advisers have hidden behind the regulation of firms and this change should engender individual responsibility.
Some firms struggle to control the actions of their advisers. For example, while a firm may request that all advisers place their business through a certain distributor this can be ignored.
Even when the benefits are outlined some individuals continue to place business as they have always done rather than do what is best for the firm.
Of course, some may suggest that making advisers individually accountable will only ensure they plough their own furrow.
But I believe it will not only make advisers more focussed on the advice they give and the business they place but also ensure they have a keener sense of what is best for the firm they work for and, critically, the provider or lender supporting their needs. After all, no adviser is an island.