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Mortgage Vision: FCA rules have changed how brokers source products

  • 03/09/2020
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Mortgage Vision: FCA rules have changed how brokers source products
The Financial Conduct Authority’s (FCA) latest guidance requiring advisers to recommend the cheapest suitable deal affects the way products are sourced, says Geoff Webb national account manager for Mortgage Brain.


Speaking at the Mortgage Vision 2020 virtual event, Webb explained the impact of the FCA’s PS20/01 guidance on mortgage sourcing.

From 30 July, mortgage intermediaries have had to recommend that their clients take the cheapest suitable mortgage or explain and record the reasons why an alternative product has been chosen.

The regulator introduced the change to protect consumers from overpaying when they receive mortgage advice.

The FCA’s calculation of cost includes the product, application fees and interest over the deal term.

As a result, Mortgage Brain has developed an FCA cost column which will display the cheapest products according to the FCA’s guidance.

However, even without that filter used brokers will be told what position their chosen product is on the FCA’s cheapest option column.

If the cheapest deal is not being recommended, enhanced wording within the system will help advisers record the reasons why.

Webb said: “We’ve shown how technology can filter out the white noise applying Criteria Hub filters within that sourcing journey, filtering out unsuitable results.

“And when we say unsuitable results they could potentially have been the cheapest result but as we know the cheapest isn’t always the best product.”



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