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AMI: Using online advice difficulties to justify execution-only is ‘complete misnomer’

  • 16/07/2019
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AMI: Using online advice difficulties to justify execution-only is ‘complete misnomer’
The Association of Mortgage Intermediaries (AMI) is warning that the perceived difficulty of providing a smooth online advice journey is being used as an excuse to expand execution-only sales.


In its quarterly bulletin, the trade body noted this was not necessary and that it was possible to create simple, customer-friendly online processes without removing advice, which were already being used regularly.

“It is being argued that the move towards execution-only for simpler refinancing deals would facilitate much better use of technology to smooth the customer experience of the process,” AMI said in its quarterly bulletin.

“The so-called ‘difficulty’ of providing fully regulated mortgage advice online without the need for human intervention has become a convenient justification for the ‘need’ for execution-only. This is a complete misnomer.”

It noted that around £7bn of mortgage applications have been originated online as part of a fully advised end-to-end process with customers having the option to jump out to speak to an adviser if they need help.

“This is online advice with the option of a human touch but which can be fully completed without.”


Key to sustainable mortgage broking

It further warned that the regulator should not confuse the issues and that it was the way firms were using technology that was the problem.

“The market and the regulator must be extremely careful not to misdiagnose the challenges facing this market and rush to change policy that will result in thousands of mortgage borrowers receiving a poorer outcome than they should and would under existing regulation,” AMI continued.

“Technology is not the problem; how some firms in the market are deploying it is.

“This comes back to supervision and taking the time to really understand the services available in the market, across the whole of the market; it is time to listen more broadly than just to the self-professed disruptors.”

AMI concluded that this sector of remortgaging and product transfers could be the defining one for advisers and their businesses.

“Increasingly, retention is the key to sustainable business in mortgage broking. It will only become more so if the regulator chooses to reintroduce execution-only transactions,” AMI added.


Regulator cannot be left alone

Meanwhile, AMI warned that the Financial Conduct Authority (FCA) should not be left alone to decide how inter-generational financing should operate, but that it required political input too.

The trade body also suggested it expects interest rates to rise a little quicker than the Bank of England is currently predicting, but not until next year.

And it highlighted that builders were not yet considering changing their plans despite the significant overhaul of Help to Buy which could severely limit buyers’ options using the scheme.

Considering inter-generational finance, AMI said it was timely that the FCA had announced its intention to lead a consultation with industry on the matter.

However, it was “concerned at the lack of overarching direction on this given to the regulator by government”.

“Brexit and a leadership contest may be priorities in the short-term, but politicians cannot afford to pass the buck on social policy formation that will affect the people of Britain for generations to come,” it continued.

“The regulator cannot be left to scope this vital policy area without direct intervention and guidance from elected politicians.”



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