Under the new rules the non-advised sales route has been removed which allowed consumers, including those with no knowledge of financial products, to choose their own mortgage product.
Under the MMR borrowers who do not wish to take advice can choose the execution-only route which cannot involve human interaction.
But this leaves a question mark over what brokers should do if a customer rejects their advice.
FCA director of mortgages and consumer lending Linda Woodall said despite having interaction with an adviser if the customer rejects advice the sale can become execution only.
But the broker can choose not to offer this option.
“Even if the customer decides not to take advice following the interview the broker still has an over-arching responsibility to act in the customer’s best interests if they feel the product the customer is selecting is not the most suitable,” she said.
Brokers must explain to customers that by going against the advice of the broker they will be giving up their rights to complain to the Financial Ombudsman Service should they be dissatisfied with the mortgage.
If the sale continues down the execution-only route the customer must explain in writing that they have chosen to ignore the advice given and have selected their own mortgage product.
If the broker decides to terminate the interview following the rejection of advice this must be explained in a file note and kept with the customer’s notes.
