This week the Financial Conduct Authority’s (FCA) mortgage advice rules consultation provided many comments from the industry.
One of these came from Dougie, with his response to the article: FCA to require advisers to explain why they have not chosen a cheaper mortgage.
He said: “The FCA is teaching brokers to suck eggs. Most of the time any product chosen is top of the sourcing list. Of the 30 per cent of cases which are not, I am sure most brokers write on the sourcing sheet an explanation for this so the staff doing the suitability letter can type up the reasons.
“The last case I did with one lender was a home mover, slight adverse, keeping their existing property, had two jobs, a wife not going on the mortgage and also solar panels on the roof of the purchase property.
“Can anyone tell me the name of the lender I had to use? The FCA has no clue what brokers need to know or research to place cases. I am sure they think every case is vanilla.
“I read 30 per cent of the population has some form of blip on their credit history so how do they know these people could have had the cheapest rate going.”
Future CMC claims
Another contribution came from Terry Arch, with his response to the article: FCA encourages execution-only by relaxing mortgage advice rules.
He said: “The object of the Mortgage Market Review (MMR) was to ensure clients received appropriate advice and now they want to remove this so people can do as they like.
“What’s the point? I can see loads of claims in the future from clients, to Claims Management Companies (CMCs) when they realise that they got it wrong 20 years previous.
“What was the point of all the money spent and the gaining of qualifications if they can now be ignored?”
FCA is not here to protect advisers’ jobs
Another top contribution came from Arron Bardoe, with his response to the same article.
Bardoe said: “My take on this is that execution-only systems require a client to have a firm view of what they want, which is not realistic.
“For example, a client might look at a two-, three- and five-year fixed rate. They are happy they will stay in their home and their circumstances are settled and they are reasonably comfortable about interest rates.
“A system that only allows them to peruse one of the product terms would be restrictive – e.g. they cannot compare the three rate terms together.
“If the cost difference is small (in the client’s perception) between the two- and five-year deal, they might select the five-year. Conversely, a perceived large difference could mean they are happy to go with the two- or three-year. This can still be an execution-only process with the client owning their decision.
“Of course, as an adviser, I would suggest advice is essential for most borrowers and many recommendations are not simply about cost, but the FCA is not here to protect our jobs and it must allow consumers the right to access products directly.”
Getting a mortgage is like buying a tin of beans
Replying to the same article, the last contribution came from William.
He said: “Why don’t this lot start to run the NHS – we could then do away with all those expensive and overworked GPs.
“Who needs qualified advice? People could go online – search their symptoms – and then self diagnose their illness and book themselves into a hospital.
“They could for example have a headache and decide: ‘my mate down the pub had one of those and he had a brain tumor, I am going to book myself in for a brain operation’.
“So getting a mortgage is the same as buying a tin of beans online from the supermarket – except when you find out that that the cheap beans don’t taste as good as the ones a little dearer – you just do not buy them again next week.
“That’s not quite the same when you chose yourself a five-year fixed rate mortgage on the biggest purchase you ever make in your life and then suddenly discover you’ve made the wrong choice.
“What are you going to do, take it back for a refund? Or go back to the lender and say ‘Sorry I did not realise – can I have my money back and you drop the five per cent early repayment charge (ERC) please?’”