Speaking at the UK Finance Mortgage Conference, Michael McKee, partner at DLA Piper, said the regulator will look at the Perimeter Guidance to determine what constitutes advice and what guidance when customers talk to lenders.
McKee’s presentation ‘2020 Vision – Mortgage Regulation Issues Next Year,’ suggested a number of changes the FCA was likely to announce in Q4 based on its Mortgage Market Review earlier this year.
He said amendments to rules on mortgage advice would likely fall into line with any new tools being developed to assist execution-only.
He added the regulator would likely consider how much detail should be required by lenders to complete an execution-only deal.
“The FCA will look to cut out some of that detail to make it more cost effective and straightforward to provide that sort of service,’ McKee said.
As well, he predicted the regulator would modify the trigger between lenders and customers to more clearly determine when an interaction requires advice. This was part of the regulator’s plan to drive borrowers to the advised route encouraging them to seek advice where they might have gone straight to the lender.
Adviser transparency
McKee further expected the FCA to put a “stronger obligation” on advisers regarding pricing. Advisers would be required to explain why a particular mortgage was chosen when it was not the cheapest option.
