It’s a little difficult to know where to start this week. Intermediaries seem to have gradually become the scapegoat for the all the ills of the industry, and this all came to a head in a few crazy days.
With the FSA seemingly exasperated by the failings of small firms – especially by the level of mortgage fraud that it has uncovered – it has announced that it is to tackle a further 200 firms. Having failed to find against almost any firm for the past couple of years, it is now catching up. A cynic might suggest that it needs to repair its damaged reputation after the Northern Rock fiasco, and by getting tough with small mortgage firms who are generally too small to put up a fight, it can maintain a high profile. I am not saying that the firms it has found against do not deserve to be fined and pilloried. We do not need rogue mortgage brokers to cause problems for the decent majority, especially at this time. However, it could be suggested that it is the line of least resistance for the FSA to go down this route.
It was particularly bad timing for the latest Which? attack on the mortgage industry. In a tiny survey of 50 brokers, it claimed that 90% were giving shoddy advice, with just four of the 50 passing its test. A small crumb of comfort was that three of the four were independent financial advisers, and that the majority of advisers they spoke to came from banks and building societies. It is disappointing that these figures are so low, but it does highlight the difference between sales and advice.
While Which? carries a lot of weight with consumers, it is irresponsible (in that it is not beholden to anyone) and says what it likes. Mortgage Solutions is not without influence too, and will continue defend advisers to the best of its abilities. The actions of the few cannot and will not be allowed to tarnish the good work of the many. n
