Speaking on a Mortgage Solutions masterclass, Cunnington said he liked the ethos of Consumer Duty and it struck him that “mortgage intermediaries were probably as close to it way more so than other areas of financial services, because we do put the client first”.
He said the trick was with evidencing it.
A good change
However, Cunnington said he saw Consumer Duty “as a positive” because it introduced structure and guidelines.
For his firm, the new rules resulted in a change to its fee structure. “Previously – we’ve got 23 advisers – and it used to be ‘could you really say, hand on heart, if a client walks through the door, the fee does not change depending on which adviser they see?’ I probably couldn’t say that hand on heart. Whereas now, it’s clearer, there’s guidelines, clients know exactly what the fee structure is.”
He said going through the process, LDN Finance felt proud of its fees and stuck to them, but lowered the charge for product transfer and increased the fee for more specialist services. He said there was a commercial element and the firm now explained to clients why the fees were different, and the complexities involved.
Jodi Spreadbury, senior mortgage and protection adviser and head of lender relations at The Mortgage Broker, said being part of a network meant her firm always had strict guidelines, so it was already aligned with the Consumer Duty expectations.
She said this led to a “few tweaks here and there”. Spreadbury added that the rules would bring rogue firms into line and said this was better for clients.
Karl Wilkinson, founder and CEO of Access Financial Services, said his firm also already put the customer first and other companies with that approach did not have much to do regarding Consumer Duty.
He added: “We all look after the customer and all we needed to do from an FCA perspective is just make sure that we’re falling in line with what it expects of us.
“In the next couple of years… let’s see what the FCA actually expects from us, but I wholeheartedly embrace Consumer Duty and what it means, and how important it is that we communicate to the customer and make things clear and make sure they’re getting the best possible service.”
