Richard Griffiths, Network Data
The non-advised sales route is the obvious route for brokers who want to transact business with clients through their website. With online business there is very little client contact, however with face to face contact it could be very difficult not to give advice. It will be hard to stick to generic information only. If a client goes into a broker’s office and does the fact find and the filtering questions, I defy any broker to get through it and not get asked for advice. It begs the question what is the broker trying to achieve with non-advised sales? They have still got to be regulated by the FSA and its requirements are clearer for advised sales.
Sean Hornsby, Mortgage 2000
When the FSA released CP186 the initial industry reaction seemed to be that it was great news because it had removed the confusing filter-questions route from the choice of advised, non-advised and filter questions. But it has not actually got rid of filter questions, they are still going exist but they will be known as scripted questions and will be an option under the non-advised route. I do not dislike filter questions, I think they are the way that most advisers give advice anyway, and the fact that they will now be a sub-category alongside execution only under the non-advised route was the logical place to go. My understanding is that at the moment this type of question can be made up by anyone, so under the FSA if there are strict guidelines then it will bring more conformity and transparency, but not necessarily make it easier.
Stephen Atkins, Mortgage Next
I do not think that it is such an easy option, I think the majority of brokers will now switch to the advised route. I think the difference between what was proposed and now is quite narrow, so I think most will go down the advised route and will buy PI insurance to cover it which I do not think will be as expensive because the lenders will have the responsible lending rule imposed upon them. That takes some of the pressure off the broker. I think that those who wanted to go down the filtered question, non-advice route still can, but they have got a fair bit of work to do whereas for the majority who want to go down the advice route it has now been made more sensible and I certainly think it will be easier to get PI because of the changes in responsible lending requirements for lenders.
I think this route is designed for lenders with direct call centres who work from a portfolio of a set number of products and they can easily train their staff and make sure that all calls are recorded. Where I do think it closes the door is for the smaller mortgage adviser. I am not sure how much time they will want to spend in preparing and having the scripts in place to offer this type of service. It could be that it is too rigid for them. Also, in terms of supervision and in terms of sticking to the script, who is going to supervise the one-man band mortgage adviser? So I think it is one for those that do not want to go down the advised route to be aware of.
Chris Cummings, AMI
AMI’s view is there needs to be a clear line between professional mortgage advice given by a regulated adviser that a client can have confidence in and an execution only sale, and we are disappointed to see anything that is a blurring of the line between the two. There is a place in the market for execution only sales where an individual can walk into a high street bank or building society or mortgage professional and say I want this product at this rate and sign there and then. As soon as you enter into filter questions it does open up a grey area where consumers need to be protected. Any firm that has these questions needs to have incredibly rigorous training and competence regimes, including recorded telephone conversations that are kept for a number of years.’
Charles Ansdell, Inter Alliance
Initially there will be an increase in non-advised business as companies seek to take advantage of these rule changes. However, the vast majority of people are still going to want to seek advice before entering into a mortgage decision. With this in mind, there is going to be an onus on companies to prove that clients did not want advice and this is likely to be have to written into the terms of business. Furthermore, companies may well have to put in place disclaimers to ensure clients fully understood that they have refused advice. In the long term, however, it is most likely that the FSA is going to tighten up these rules, through future consultation papers, to ensure that customers have access to advice.