Speaking at the annual AMI dinner, Andrew Montlake (pictured) said everyone in the industry wanted a “slicker system” and there is a lot in the Financial Conduct Authority’s (FCA’s) Mortgage Rule Review that AMI agreed with, but the “advice trigger is not the issue slowing down the process”.
This was echoed by AMI CEO Stephanie Charman, who gave her inaugural speech at the dinner.
The regulator announced that it would be consulting on mortgage rules so it would be easier for consumers to talk about their options, lower their mortgage terms and access cheaper products for remortgage.
One suggestion is to change the advice trigger, so people can speak to their lender about options without having to go through the advice process.
He said: “Removing this [the advice trigger] and ushering in more execution-only opens all the discussions we had with Mortgage Market Review (MMR) once more and seems totally at odds with the very essence of Consumer Duty. It is the wrong answer to a totally different question.
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“This isn’t innovation – it’s déjà vu. It risks repeating mistakes of the past, where people didn’t understand the products, missed out on better options, or worse, got pushed into decisions by someone with their own agenda.”
He warned that, if unchecked, more execution-only deals could lead to “foreseeable harm, vulnerable customers not being identified, less protection being taken when most needed and more complaints in the long term”.
“It means that many will not know about viable, better alternatives, products such as offsets, later life lending, long-term fixes, cheaper rates not being identified before completion and so on,” he noted.
Montlake added that it could potentially hinder smaller lenders, with “larger ones gaining more power, resulting in less choice and ultimately harming and reducing the number of brokers further, meaning that less people get the advice they need”.
“When the inevitable issues start appearing, and sooner or later they will as lenders are ruled against where borrowers believe they have taken advice from a ‘mortgage specialist’, no matter what risk warnings are in place, trying to then turn this back would be an issue if those brokers are no longer there,” he said.
Removing advice for more execution-only is like ‘taking airbags out of cars to make them lighter’
Montlake reiterated that “removing advice in favour of more execution-only is like taking airbags out of cars to make them lighter”.
He added that 97% of mortgages being done through advice should be seen as a “clear success” rather than a “failure”.
“Consumers have voted with their feet en masse and it’s towards advice. I have yet to see consumer data saying they want the opposite. If customers are encouraged to go directly to lenders without advice, it is very likely the best outcome will not be considered,” Montlake said.
He continued on to say that brokers are “much more than a cost” and are the “lifeblood of the industry”.
“We are the trusted, the guard rail, the guide, comfort and emotional support, even marital guidance councillor,” Montlake added.
He urged lenders considering execution-only to “think twice and be careful what you wish for”.
“We win as an industry in partnership, and there will be no place for those who are a friend at the front door and [a] wolf at the back,” he said.
Crucial to support industry mental health
Montlake said that in the past year, the mortgage industry has “faced an onslaught”, pointing to “increasing compliance demands, withdrawn products, [and] a sea of resubmissions” in a world that is “more litigious, more demanding, and frankly, less forgiving”.
However, he praised the industry, adding that it was “still standing and still serving”.
“But let’s not sugarcoat it. The toll on our mental health is growing. The Mortgage Industry Mental Health Charter (MIMHC), led with energy and heart by the brilliant Jason Berry, is about to launch its latest research – and I urge every one of you to engage with it,” Montlake said.
The MIMHC launched its fifth annual Mental Health and Wellbeing Survey earlier this month. It takes fewer than five minutes to complete and is completely anonymous.
He said that “taking care of our people isn’t optional anymore, it’s essential”.
“Whether you’re a broker, a lender, or part of the wider ecosystem – your teams are your greatest asset.
“Together, we can build not just a better industry, but a healthier, more resilient one. One where talent is nurtured, not burned out. Where wellbeing is a priority, not an afterthought, because when we support each other, we all win,” Montlake said.
Diversity, equity and inclusion schemes are ‘not done or dead’
Montlake continued on to say that diversity, equity and inclusion initiatives are “not done, or dead”.
“It has not ceased to be or shuffled off this mortal coil, no matter what those across the pond say or certain politicians in the UK trying to jump on an anti-woke bandwagon.
“Those companies who pause or row back now were never authentic in the first place, and people are watching,” he said.
Montlake said the mortgage industry needed “diverse new blood in our industry and a clear pathway for them to rise to the top by merit and not held back by conscious or unconscious biases”.
“Our customers of the future demand it. In other words, ‘woke ain’t broke’. Many just don’t understand what that word actually means. To those still committed, own it, take back the word,” he said.
