When lender nudges arrive before advice – Howes

During 2025, I feel the broker market spent a lot of time thinking about mortgage market regulation change theory and how it might play out in practice.

Now, with the publication before Christmas of the Financial Conduct Authority’s (FCA’s) Feedback Statement and roadmap, we are on the path to what those regulatory changes might actually look like and what this could mean for advisers in the future.

How might advisory roles shift in response to – what are likely to be – some fairly substantial changes? One of my main concerns, particularly in relation to the greater use of artificial intelligence (AI) – and also greater levels of direct communication between lenders and their mortgage customers – is where that might leave advisers.

Specifically, could advisers be drawn into a more ‘marking the customer’s homework’ style of business, with borrowers presenting the adviser with their ‘preferred choice’ of mortgage and asking for a view, not necessarily wanting advice, and therefore making it extremely difficult for them to earn income from such interactions?

 

The banking app as the first point of influence

I spoke last month at a conference, and those who attended were probably somewhat surprised to be asked a series of simple but obvious questions.

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Firstly, who has a mobile phone? Answer: everyone. Who has a banking app on that phone? Again, unsurprisingly, every hand went up. I then asked how many advisers had recently asked a client which banking apps they use, or which lenders are most likely to be messaging them directly. Very few hands went up.

That gap is important. The banking app is now the ‘main branch’ for most customers. It is always open, it is trusted, and it is where lenders are increasingly prompting customers to review, switch or consider their mortgage options, regardless of whether they have a mortgage with them or not.

These prompts are not aggressive sales messages. They are positioned as helpful reminders, often wrapped in language about saving money or avoiding higher rates. In a very true sense, based on what they’re receiving via their apps, by the time a client contacts their adviser, they may already feel informed, reassured and perhaps partway through a decision.

 

How ‘marking the homework’ begins

This is where the risk starts to appear, not through intention but through timing. A client receives a prompt from their bank or lender, reviews the options available to them, and then calls their adviser with a simple request: ‘Can you just check this looks right?’

From the client’s point of view, that feels reasonable. From the adviser’s point of view, it could be uncomfortable. The client appears not to want a full advice process – therefore, would a broker fee apply here? They are not asking for a recommendation from scratch. They simply want reassurance.

The problem is that reassurance is not neutral. Looking at a product choice and commenting on it is likely to bring with it a liability. Indeed, it’s still likely to be treated as advice if something later goes wrong.

Whether this is the way the market moves remains to be seen. However, if it does, then advisers could be edged into a position where they are effectively validating a decision they did not shape, without being paid for advice, while still carrying full responsibility. That is not a sustainable place to be.

 

A question about deliberate alternatives

So, what are the options for advisers here? Well, first up, the scenario does lead to a fair but difficult question: if banks are able to guide customers through product choices using AI journeys, direct prompts and self-serve tools, could advisers create a separate, clearly defined proposition for clients who are adamant they do not want advice?

This is not about avoiding responsibility. It is about being honest about what the client wants and what the adviser is being asked to do. If a client genuinely wants to proceed without advice, is there a way to support that choice in a controlled and transparent way, potentially using the same AI-based leeway the FCA appears to be offering to lenders themselves, rather than slipping into informal checking that carries hidden risk?

Some lenders already accept execution-only cases from advisers, while others do not. That tension has existed for years. What has changed is the way customers are now being guided towards choices before the adviser is involved.

Whether a separate entity or a ring-fenced service is the right answer is open to debate. It may be that for many firms, the risk outweighs any benefit. But the question itself is becoming harder to ignore.

 

Why clarity matters more than ever

What advisers need to avoid, though, is an undefined middle ground. A space where clients believe they are being given a rubber-stamp by the adviser, where advisers believe they are helping informally but not giving advice, and where a complaint later lays all this out as open to interpretation.

If advisers are going to say no to these requests, that needs to be clear and consistent. If they are going to say yes, it needs structure, wording and process that reflect the reality of the responsibility involved.

 

The wider answer sits earlier

The most effective way to reduce this potentially uncomfortable pressure is perhaps not to wait for the client to arrive with a half-made decision. It is to move earlier. And, of course, if they do want a box ticked, then the adviser needs to lay out all the protections and risks, and lack of product, service or solution access they are giving up/missing out on.

Heading all of this off at the pass, means asking clients which banking and savings apps they use from day one, which lenders they already hear from, and understanding when product prompts are likely to land.

It means treating future direct product offers as key advice moments and staying in touch before the lender’s message arrives. It also perhaps needs a level playing field for advisers from lenders, one cannot help but notice the new type of mortgage offered by the banks called the ‘relationship mortgage’, based on customers signing up to premium banking products in return for a lower mortgage rate.

 

A quiet shift worth noticing

None of this suggests advisers are about to be sidelined. Advice remains valued and needed and of course recognised by our lender partners. We know, from the regulator’s own figures, that over 90% of new mortgages come via the advice channel. But influence can shift quietly, without any rule change or a headline announcement, and firms must plan and prepare for this.

Now we have firmly entered 2026, I keep asking the same question of firms. It’s not a question about whether the mortgage business is there, but instead, who controls it? That question is increasingly shaped by who reaches the client first, and advisers need to decide how they want to respond.