Speaking during the panel session at the event in Sandown Park, two specialist lenders raised serious concerns with the FCA’s approach to encouraging execution-only, while another warned it could lead to the erosion of procuration fees for product transfer business.
HTB sales director of specialist mortgages Alex Upton (pictured) argued the FCA had got it wrong.
“It’s a dangerous route execution-only, I think it’s a very narrow solution where the main viewpoint is price is the most important thing – we all know that that is not the case,” she said.
“The main focus here was that the regulator is looking at the right products ending up with the right customers.
“I think inevitably that is the correct issue, I just think they’ve come to the wrong answer.”
Pricing incentives a concern
OneSavings Bank sales director Adrian Moloney suggested that this would have a greater impact on product transfers and in the mainstream market, but also had doubts about its effect.
“The bit that concerns me in the prime area is if there is an incentive, i.e. a pricing incentive, to send someone down the execution-only route and take away from what is correct advice, because the Mortgage Market Review proved some good rules.
“I think its less likely to affect the specialist market as we only deal with intermediaries.”
Association of Mortgage Intermediaries (AMI) chief executive Robert Sinclair also raised the issue of dual pricing incentives driving people away from the protections within regulated advice.
End of PT proc fees
Octane Capital CEO Jonathan Samuels agreed that the main challenge for brokers may come from a drop in income from product transfer business.
“If I was a broker and relied on proc fees from product transfers I’d be concerned,” he warned.
“I’d see this as the major step towards that gradually being phased out because if consumers are just able to log on and do it all themselves without advice perhaps there will be no room for the broker.”
The Specialist Lending Event 2020 continues this week with free registration still available for the events at York and Liverpool.