Put simply, if a consumer seeking a mortgage speaks to a staff member within an intermediary business or a lender, whether by phone of face-to-face, then that staff member must give advice about mortgages, not information-only.
For the vast majority of intermediaries this means no change from current operating procedure, but for many lenders it will be a big change, as lenders have often worked on an information-only basis.
How do mortgage intermediaries feel about this? Will the removal of this channel difference be damaging to their business or beneficial? To find out, BDRC Continental questioned a random sample of 100 mortgage intermediaries nationwide in the second half of July.
We asked the following question:
From April 2014, the Financial Conduct Authority has said that almost all mortgage sales will have to be advised. So, like mortgage intermediaries, lenders’ own tied sales staff will have to offer mortgage advice, not just information only. Overall, how do you think this will affect intermediaries’ share of mortgage business? Do you think it will INCREASE or REDUCE the share of mortgage business being placed through intermediaries or will it MAKE NO DIFFERENCE?’
The results show that most intermediaries are optimistic about this change. By a ratio of almost 20:1, many more thought this change would increase their share of business than reduce it. Two-in-five remain uncertain.
Increase intermediaries’ business 56%
Reduce intermediaries’ business 3%
Make no difference 41%
Source: BDRC Continental’s Project Mercury. A random sample of 100 mortgage intermediaries across the UK taken between 17-31 July 2013.
Tony Wornell is director at BDRC Continental
