The warning came from Association of Mortgage Intermediaries chief executive Robert Sinclair, who highlighted that the way firms were dealing with specialising markets, particularly around laterlife borrowers, could cause problems.
Speaking at the Financial Services Expo, Sinclair noted that much of the problems came from the way advisers were regulated and authorised, which ignores the need for a holistic approach.
He said: “If you’re a mortgage-only adviser you can do interest-only and you can do retirement interest-only RIO advice.
“If you’ve got equity release permissions you can look at further products, but if you’re in a firm or network that’s carrying all permissions you get to a very different place.
“If you give one element of the advice when a customer walks in and you just deal with that element without taking the rest into account, it leaves the firm very exposed.
“The biggest risk we have is that we see claims further down the line because they have closed down the conversation too early,” he added.
Consumers are not siloed
Sinclair suggested this would need to be solved, potentially by breaking the firm up into sub groups of partnering advisers giving holistic advice, or by gathering together surgeries of advisers who do all things.
These or similar approaches would ensure the customer is being given holistic advice by the firm covering all its permissions.
He also highlighted that this was a wider problem within the industry.
“Product manufacturers have a responsibility to think about who they distribute through and we have responsibility on the distribution side about what we’re prepared and not prepared to do within that framework,” he continued.
“And we need to have more grown up discussions about that than we are having at the moment, because we represent siloed approaches because the regulator is siloed, but consumers are not siloed.”