View more on these topics

U-turn on advice would need new consultation

If the Financial Services Authority were to do a U-turn on its proposals for non-advised sales it would have to consult the industry again, says the Association of Mortgage Intermediaries.

The regulator issued what was meant to be its last Mortgage Market Review consultation paper in December 2011, in which it called for non-advised sales to be banned.

It wants to see mortgage sales carried out on either an advised basis, or execution-only for high net worth and financial professionals.

But lender trade bodies are fighting for this proposal to be scrapped, as it would mean them having to train thousands of staff
.
AMI director Robert Sinclair says the fight is not over until the FSA brings out its final policy rules, which are expected in the summer.

He says: “I am fairly confident that if the FSA decides not to stick with its current proposals on advice it will need to consult the industry again.

“A number of MMR proposals are interlinked, so the regulator would need to go back and look at the whole thing again.”

Sinclair says if lender trade bodies are not happy with how the FSA has defined advice it would be a good idea for them to come up with a definition.

He says: “We are hoping to have discussions with the Council of Mortgage Lenders and the Building Societies Association to find some common ground between advised sales and execution-only.”

The Financial Services Consumer Panel came out in favour of non-advised sales in its feedback to the MMR last week.

The FSCP is an independent statutory body set up to represent the interests of consumers in the development of policy for the regulation of financial services.

Adam Phillips, chairman of the FSCP, says the new rules have gone too far.

He says: “The FSA is potentially confusing a request for information with advice and that makes shopping around and the buying process more difficult.

“The requirements should be limited to those customers who are credit-impaired, equity release, sale-and-rent-back, Right to Buy and potentially first-time buyers.”

He adds: “These are the groups of people who may need advice but the majority of individuals will not.”

Recommended

Week in numbers

0.1% – The amount the National Institute of Economic and Social Research estimates gross domestic product grew in Q1 2012. -40% – The amount the average travel insurance claim for skiing injuries in the US and Canada has fallen year-on-year – but £2,863 was still paid out compared with £960 in France. £12bn – The […]

Lenders treat regulatory requirements with disdain

Marketwatch columnist Andrew Montlake was right last week to name Michael Bolton as Villain Of The Week for his comments on interest-only and for suggesting brokers should be squeezed out of the market.

Newsletter

News and expert analysis straight to your inbox

Sign up
Comments
  • Post a comment
  • Maurice Edgington 13th April 2012 at 11:59 am

    I agree with the basic idea from Anonymous 10/04/2012.

  • Liz 10th April 2012 at 3:21 pm

    Why not do: 1. Fully advised, 2. Advice on a limited range of products (client says I want a 2 year fixed rate remortgage of £100,000 over 25 years on a repayment basis – please find me the cheapest deal, for example), 3. Information only (client specifically asked to apply for eg: Halifax’s 5.00% 2 year fixed rate for £100,000 over 25 years on a repayment basis)… ie: like under MCCB Rules! Easy to understand, and yes some people have said they thought they received advice when they didn’t but clients need to take some responsibility for having a brain. Also if a particular company is getting many instances of such complaints then surely better that their procedures are reviewed and that disciplinary action is taken against them if neccessary rather than causing more confusion when the rest of us have been doing a good job thank you very much.

  • Liz 10th April 2012 at 3:19 pm

    Why not do: 1. Fully adviced, 2. Advice on a limited range of products (client says I want a 2 year fixed rate remortgage of £100,000 over 25 years on a repayment basis – please find me the cheapest deal, for example), 3. Information only (client specifically asked to apply for eg: Halifax’s 5.00% 2 year fixed rate for £100,000 over 25 years on a repayment basis)… ie: like under MCCB Rules! Easy to understand, and yes some people have said they thought they received advice when they didn’t but clients need to take some responsibility for having a brain. Also if a particular company is getting many instances of such complaints then surely better that their procedures are reviewed and that disciplinary action is taken against them if neccessary rather than causing more confusion when the rest of us have been doing a good job thank you very much.

  • Anon 10th April 2012 at 3:11 pm

    Maybe MMR will need to be re-launched, possibly with an amended middle letter – heard this somewhere before ?

  • GARY 10th April 2012 at 2:57 pm

    It will just be delayed, delayed & delayed some more, until it’s all forgotten or a new regulatory body kills the idea off.