The regulator was heavily criticised by Association of Mortgage Intermediaries (AMI) bosses last night at the trade body’s annual dinner for its “worrying” fixation on price and for appearing to have “pre-determined” outcomes with consultations being little more than a “process tick-box exercise” with “no robust impact analysis”.
AMI chairman Martin Reynolds highlighted that the volume of papers issued by the FCA was “unhelpful” and “does nothing to help firms plan and develop for the betterment of their clients”.
Reynolds pointed out 11 papers from the FCA in the last four months along with others from the Financial Ombudsman Service and Financial Services Compensation Scheme.
“I would ask, are all of these really in the best interests of the consumers?” he said.
“The challenge is they appear to be issued in silos with some having little or no robust impact analysis included.”
Not true consultations
Reynolds noted that AMI had a positive relationship with many sectors within the FCA, but felt the regulator had become more closed-minded and less willing to listen to the industry.
“We do feel the FCA is changing, it does feel less consultative at times than previously and we feel there could be better consumer outcomes if it approached consultations in a more open-minded way, rather than what appears to be a pre-determined outcome approach,” Reynolds continued.
“In our view this is not true consultation but more of a process tick-box exercise.”
Speaking specifically about the FCA’s MMS, Reynolds also hit back at the regulator’s approach and criticised it for using “misleading” figures to justify its position.
“I will say that the continued fixation on price over best advice is worrying. The continual use of the statistic that 30 per cent of customers could have had a cheaper product is misleading,” he said.
“While price is a determinant in any advice process, it’s not the only one.
“I would welcome feedback from the regulator in relation to [its] research on how many of those 30 per cent actually received the best advice while not the cheapest product. Surely that is the full outcome from any advice process.”
He added: “I will make no apologies for keeping this issue on the agenda – good advice should be at the heart of all discussions with consumers.
“The rush to use price as sole determiner and the potential extension to the execution-only rule is wrong and it could have long-term repercussions with customers losing valuable protections.”
Mortgage Solutions has contacted the FCA for a response.