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Mortgage Solutions | 31 Jan 2012 | 14:50
Legal & General’s director of housing, Stephen Smith, warned the FSA’s proposal to end non-advised sales could inadvertently hamper intermediaries and may be addressing the wrong issue.
Speaking at the Mortgage Talk conference in Leeds last week, Smith (pictured) said that he had "mixed views" on implementing a rule insisting all mortgage sales are advised.
He said: "I think the FSA has addressed the wrong issue slightly. Some people are walking out of bank branches and thinking they have been given advice. However, I am not sure that there was sufficient exploration into how that could change.
"We are jumping to all sales being advised, but what if in the future an intermediary wants the option of non-advised sales for certain clients?
"I am worried about painting ourselves into a corner. However, it is still under consultation."
Nevertheless, lenders speaking on the same panel supported the FSA's proposal.
James Chidgey, senior manager of corporate accounts at Nationwide, said it could prove a true boon for business going through intermediaries.
He said: "I think it is fantastic news for the intermediary sector, as it finally puts bank advisers on the same level as them, having to give formal advice.
"In this new world of regulation, if customers have to go through the sales advice process, I would imagine they are more likely to want to go through a mortgage adviser who can look at the whole of the market. I think this is the biggest plus that intermediaries have had from regulation in many years."
Peter Curran, director of strategic partnerships at Lloyds Banking Group, added: "The objective behind it should be supported. Most of our advisers are qualified anyway, but we are gearing up for the change.
"However, it won't impact on our lending strategy, which is dictated by funding. We will continue to support both direct and intermediary channels."
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Recent comments
I personally hope that the FSA don't try and please everybody by watering down the proposal to make all sales advised sales. I think that the reason why the FSA has not worked is because they have tried to please everyone when they drew up the rules that we are all supposed to work to the the issue of Advised vs Non-advised sales is a classic case of this. As I have said before, the vast majority of customers going into a bank or Building Society think that they have been advised when actually this is not the case. My bet is that the majority of brokers, certainly those who are left out there now that the cowboys have gone back to selling double glazing or cars, are registered to give full advice and recommendation. It should be a level playing field and not one rule for the banks, building societies and big boys and one rule for the rest of us, which has been the case since M-day!
Mark Sutton
31 Jan 2012 | 16:59
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Non-advised sales are a short cut that should be dismissed out of hand. Those with vested interests will argue otherwise but those interested in the reputation of mortgage brokers and customer outcomes will agree this is a step in the right direction. Direct sales will suffer but intermediaries will benefit. The banking lobby must be resisted.
kevin fowler
31 Jan 2012 | 17:42
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