Under new FSA proposals, mortgage intermediaries will have to describe their services in the same way as investment advisers, even though the remuneration rules will be different.

While investment advisers can not receive commission after 2012, mortgage advisers can continue to be paid in this way.

AMI director Robert Sinclair says extending the RDR’s disclosure rules to the mortgage arena, but not its remuneration requirements, may confuse clients.

“There is a concern that, if we are using the same labels, there will be confusion given the different definitions,” he said. “It might be a little tricky.

“It causes a problem in terms of having to go through the explanations. The consumer will probably think: Are you mad? When you reach this stage, you have to think that maybe we are.”

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In last week’s Mortgage Market Review (MMR) consultation paper on distribution and disclosure, the FSA proposed removing the requirement for an independent firm to provide consumers with a fee option.

It repeated its view it has not seen significant evidence of commission bias in the mortgage market, in stark contrast to its findings in the retail investment arena.

However, it said its proposal to apply the independent and restricted labels to all firms in the mortgage market was “consistent” with its approach in the retail investment market.

Mortgage advice firms who label themselves as ‘independent’ will have to source products from a ‘comprehensive and fair analysis of the relevant market’.

They are also required to offer an ‘unbiased’ and ‘unrestricted’ service to consumers.