Speaking at the FSE Manchester event, Sinclair highlighted the large amount of product transfer activity – estimated by AMI to have reached £100bn in 2016 – undertaken directly by lenders and suggested it was undermining the provision of advice.
“Product transfers are the hidden bit of the market – we think it accounted for £100bn of lending in 2016 of which 85% was done direct, non-advised by the lenders,” he said.
“In that sense the great work done by the MMR in order to promote the benefits of mortgage advice has actually been undone by some back-door manoeuvring by the lenders.”
Sinclair also re-iterated his calls for a fairer Financial Services Compensation Scheme funding system which would be based on an up-front levy for all financial products sold.
“AMI would prefer an up-front product levy in order to fund the FSCS. This would cover every single financial service product and would put a kite mark on a product so that consumers would know they were protected; no kite mark, no protection,” he continued.
Sinclair acknowledged that political and regulatory upheaval probably meant such a change was unlikely in the short-term.
However, he argued revisions could still be made. “At the least you should only pay for misdemeanours that take place in the areas in which you operate,” he said.
“If you advise on mortgages you should not be paying for problems in pensions, for example.”
He also said that AMI was seeking a 30% input into the scheme from providers, plus the trade body wanted to see quality discounts and risk-based levies for firms.
“Good firms who do good things, who have good PI cover, should pay less,” he argued. “Most firms who have PI cover, never even claim on it.”