HomeBuy agents for the Government’s new shared equity scheme have been warned by the UK regulator to inform customers they can select their own adviser, not just ones listed on its panel.
At a Parliamentary briefing last week, hosted by Yorkshire Building Society, on the Government’s Open Market HomeBuy scheme, the issue of restricted adviser panels for the new initiative was again flagged by brokers.
Ray Boulger, senior technical manager at John Charcol, raised the issue at the meeting and said though the agents were not regulated they should abide by the Financial Services Authority’s (FSA) stance on transparency.
David Hollingworth, head of communications at L&C, backed Boulger’s concerns and said the adviser’s role in the process had to be addressed better.
Commenting on the issue, Iain Cornish, chief executive of Yorkshire Building Society, one of four lenders offering the scheme, said the FSA would look at how the sales process worked. “The thing that kills the mortgage market is mis-selling scandals. The FSA and the Government are doing everything they can to make the scheme work and if we recognise inefficiencies in the sales process it will certainly be looked at and we will work with the Government to iron that out,” he added.
A spokesman for the FSA confirmed agents were exempt from regulation but added: “However, we would agree that if a customer wanted to see a separate IFA to one on the agent’s panel it should be made clear they can and it is up to the agent to make that clear.”
Highlighting the importance of intermediaries in the new scheme, Ashley Price, regional manager south at Yorkshire Building Society, told the meeting 95% of the business would be done through advisers.
Price also agreed agents needed to expand their IFA panels but added the scheme was only in the pilot stage and amendments could be made.
