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TMPE2019: FCA encouraging lenders to dual price ‘really scares me’ – Duncombe

  • 07/11/2019
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TMPE2019: FCA encouraging lenders to dual price ‘really scares me’ – Duncombe
The Financial Conduct Authority's (FCA) encouragement of lenders to make cheaper rates available for execution-only is a serious concern and could lead to price becoming “advice biased”.


Jeremy Duncombe, director of intermediaries at Accord Mortgages, made the stark warning at Mortgage Solutions’ The Mortgage and Protection Event in Manchester.

Speaking to the audience of brokers, Duncombe said the regulator’s continued focus on promotion of execution-only to customers was one of the key concerns in the market at present.



“There’s still that view from the FCA that cheapest is best and as an industry we need to keep pushing back that this isn’t the right thing to do for every customer,” he said.

“Execution-only has its place, it has always had its place, but we shouldn’t be pushing customers into choosing the cheapest rate because it’s simple, because it’s easy.

“And it really does scare me when they try to encourage lenders to offer cheaper rates for execution-only than they would do for advised sales because its theoretically easier.

“That’s a horrible position and we just don’t want to get in to where price is becoming advice biased, we’ve just got to make sure that doesn’t happen,” he added.


Sustainability key

However Duncombe noted that ultimately the biggest challenge was customer behaviour and that more than ever it was the broker’s job to be the one explaining the reality and why execution-only was not the right route.

“Digitalisation is part of that; the perception versus reality,” he said.

“When customers start online they think it’s going to easy. Again, our job is to continue that education so they can realise just what the value of advice is that sits behind it.”


Who is stealing your supper?

Dumcombe also highlighted the importance of brokers and lenders ensuring they were sustainable for the changing mortgage market, asking brokers if they knew who was trying to steal their supper?

“We as lenders need to evolve and change, this doesn’t just apply to the broker world,”

“But those lenders like ourselves who are working with the intermediary we need to make sure that we still have a supply chain of people who want to use us and continue to deliver business through ourselves.

“So we need to react and make sure what we offer to you still adds value and add value if we possibly can.

“And from the broker’s point of view, who is trying to steal your supper? Is it another broker, is it a price comparison website, and do you need to evolve to keep making sure you are sustainable as a business going forward?”



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