Sinclair also revealed the regulator is considering redefining what advice is and said it was too focused on technology as the solution to all problems – despite missing some key developments in its Mortgages Market Study (MMS) interim report.
However, he praised the regulator for wanting to tackle mortgage prisoners and suggested that a broker database was likely to be completed around the middle of 2019.
Speaking at the AToM annual dinner, Sinclair said: “We live in a market where we’re awash with capital, we are awash with money and we are empowered to help consumers do some really clever things at the moment in a way that’s not been the same for most of the last decade.
“We’re perhaps on the cusp of some interesting changes and we have a regulator that is totally confused by it all, and that’s the hardest part.”
As part of his criticism he revealed that the FCA is considering re-defining advice and questioned why this would be necessary.
“They are wondering whether they want to change advice, set some new standards,” he said.
“Really, is it so bad at the moment?
“Most customers understand that if they walk in and pick themselves that’s fine, if you tell them what to do that’s advice.
“What third way is there? I don’t understand.”
Sinclair echoed much of the industry criticism about the MMS being too focused on price alone, rather than other factors such as criteria, service levels and lending appetite.
And highlighted the FCA’s “shocking” failure to identify that firms had already been working on technology which would meet many needs for easily identifying lender criteria and products.
More widely Sinclair noted that the regulator appeared too focused on technology as a solution.
“Technology is an interesting question in our sector because we have a regulator who thinks technology should be the only answer for all our problems,” Sinclair continued.
“And not what I think, which is that it should be an intervention to help facilitate a good advice process involving a face-to-face discussion.”
“An algorithm will never fit around 40% of our market. We should use it to facilitate the customer journey, not replace what we do,” he added.
Broker directory and mortgage prisoners
However, the broker directory proposed in the MMS interim report appears to be going ahead.
“We’ve got things like this already in other sectors or through other sources,” Sinclair noted.
“We’re under pressure to develop a new one of these [for mortgage brokers] and I think we’ll come to a solution by the middle of next year that will work, so that’s not a big argument.
And there was room for some praise with the issue of mortgage prisoners, and particularly those most in the trickiest or most vulnerable situations, being highlighted.
“Dealing with these is going to be exceptionally difficult but we have a government and a regulator that wants to help them somehow,” Sinclair added.
Finally, he urged brokers to plan ahead by picking firms to partner with for certain areas of work.
“That partnership is going to be critical as we go through years of significant change.
“So think very carefully about who you want to work with,” he added.