Announcing this at the AMI Annual Dinner, chief executive Stephanie Charman (pictured), said that the regulator was challenging the sector to think differently about consumer outcomes, access and innovation through its Mortgage Rule Review.
While welcoming the Financial Conduct Authority’s (FCA’s) willingness to review regulations and listen to the sector, she said the removal of the advice trigger rule and general move towards execution-only “raises important questions”.
Charman said many would ask if this was the beginning of the end of the mortgage broker, saying her response to that was “absolutely not”.
The AMI holds the belief that consumers should “fully understand the implications of the choices they make, the benefits of advice and the potential consequences of proceeding without it”, Charman said, referencing the organisation’s engagement with the FCA and wider stakeholders to “champion the value of advice”.
However, she said the market “cannot stand still, as if we resist change, we risk becoming irrelevant”. Charman continued: “The firms that succeed in the future will be the ones that embrace technology to strengthen trust and customer engagement.”
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It is no longer a question of the value of advice, Charman said, but the cost of not receiving it.
“We believe advice plays a central role in that, but belief alone is not enough. If we want to influence future policy and regulation, we must be able to demonstrate it,” she added.
The evolution of advice
Clients of the future will not need to decide between advice or artificial intelligence (AI), Charman said, but would receive a service where advice and AI work together.
Charman said this would be “a hybrid model where technology removes friction, improves efficiency and enhances customer engagement, while advisers continue to provide judgement, empathy, context and trust”.
This approach would “apply across the board” and include later life lending, commanding advice that covers retirement planning, intergenerational wealth, care needs, vulnerability, protection and mortgage borrowing altogether.
She said the question of what holistic advice would look like was currently being asked and said this would happen through “genuine collaboration”, not “in the pursuit of individual agendas”.
Protection should not remain an afterthought, Charman asserted, and conversations about protection needed to be normalised with “smarter prompts and nudges, thinking more creatively about where those conversations can be introduced”.
She said it was common practice to warn clients of the risk of repossession if repayments were not maintained, and asked if the sector should suggest that people consider how they would continue paying their mortgage after an unexpected life change.
A thriving, different advice sector
Thanking attendees and the wider industry for their support over the last 15 months, Charman said the first few months were a whirlwind, but she had not appreciated how much the role would “challenge me, broaden my perspective, and ultimately strengthen my conviction in the role AMI plays”.
The role of the AMI has “never been more important”, she said, and the organisation has a “responsibility not simply to respond to change, but to help shape it”.
She said the future of advice was as important as the future talent entering the sector.
“We have to be honest, our sector still faces challenges around diversity, accessibility and inclusion,” she added.
A Working in Mortgages Viewpoint will be launched in September to help the AMI understand what work needs to be done to address any shortcomings.
